What Is Cost of Employee Turnover?
Quantifiable soft, hard and opportunity costs feed into the overall cost of employee turnover. These costs include hidden factors such as the:
- time and cost invested in onboarding new employees
- focus that managers and employees divert to cover vacant employee slots
- lost productivity as new hires learn the role, become qualified in key processes or obtain certification to represent products and services to customers
- real revenue and customer loss when poor hires negatively impact customer experience
How Much Does Employee Turnover Cost a Company?
According to research from the Society for Human Resource Management, the cost of employee turnover can run as high as 5x total compensation for an effective and remunerated manager. In the emerging era of people analytics, senior executives and HR teams have a window of opportunity to competitively scrutinize and proactively manage employee turnover costs.
Performance is a Complex Factor in Employee Turnover Cost
Without the support of a data-driven people analytics platform, assessing and monitoring the cost of turnover is a time-consuming, primarily manual process that significantly wastes even more resources. To optimize the contribution of a people analytics platform, organizations running it must link the platform with their performance management processes, regardless of how crude current measures of performance may be.
Mitigate the Cost of Staff Turnover More Efficiently
Linking People Analytics with performance enables us to access the necessary data to calculate the cost of employee turnover and understand the granular attributes driving superior performance. Integrating performance management and People Analytics data means rigorously assessing and constantly evaluating employee turnover costs, because ‘what gets measured, gets managed.’
PerceptionPredict goes beyond spotting sales game-changers. We’re also changing the game of calculating employee turnover cost to help you hang onto your top performers once you’ve found them. Book a demo to find out what we can offer your business.