Background to the Employee Turnover Cost Calculator
For businesses to thrive in today’s economy, finding and retaining the best employees is critical to the success of the business. This is especially true for small businesses and not-for-profits competing with larger businesses, and larger budgets, for top talent.
If you are in any doubt the employee retention is a critical problem, read the article by Josh Bersin, who is an influencer on LinkedIn and a Global Industry Analyst, “Employee retention is now a big issue and why the tide has turned”.
Bersin identified the following as key aspects that need to be considering when calculating the cost of staff turnover:
- Cost of hiring a new employee including the advertising, agency fees, interviewing, screening, and hiring.
- Cost of getting a new person up to speed on the job, including training and management time.
- Lost productivity—it may take a new employee one to two years to reach the productivity of an existing person.
- Lost engagement—other employees who see high turnover tend to disengage and lose productivity.
- Customer service and errors—for example new employees take longer and are often less adept at solving problems.
- Training cost—for example, over two to three years, a business likely invests 10 to 20 percent of an employee’s salary or more in training
- Cultural impact—whenever someone leaves, others take time to ask why.
One of the reasons the real cost of employee turnover is an unknown is that most companies don’t have systems in place to track all the costs involved when somebody leaves.
Working with Big5 Assessments we can now help you assess how much staff turnover is really costing you with our complimentary employee turnover cost calculator.
This calculator is for you are a HR professional or manager who needs to justify the cost of an employee retention initiative that you would like to introduce into an organisation.
The employee turnover cost calculator takes into account a range of factors such as:
- Number of employees
- Staff turnover
- Average annual salary
- Average recruitment costs
- Induction and training costs
- Productivity rate of a new hire
So if you are looking to find out how much your staff turnover is really costing your business or organisation then take advantage of our complimentary employee turnover cost calculator.