The Hidden Costs of Employee Turnover A revolving door of workers can take a toll on your company in surprising ways. Here are four that you might not notice.
By Gwen Moran •
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Employee turnover has some obvious costs associated with it, including recruitment, training and salary. However, every time an employee leaves, there are a variety of hidden costs you might not have considered, says Toronto-based human resources consultant Tom Armour. While you might not be writing a check for these costs, here is how turnover can drain dollars:
Slippage. When an employee is missing, the work that isn't getting done has a price attached to it, Armour says. Lost sales, production delays and lags in new product introductions all cost your company money.
Ripple effect. Turnover has an impact on the peer group, as well as the management chain, making everyone less effective. Co-workers need to pick up the slack, distracting them from achieving their own performance goals while managers need to devote time to finding a new employee. "One CEO I spoke with had his five-year growth plan turn into a six-year plan because of delays due to employee turnover," Armour says.
