Six Truths about Employee Turnover—Truths 1-3

By F. Leigh Branham
Truth No.1: Turnover HappensAchieving zero percent turnover is not realistic, especially in today’s job market.
Truth No. 2: Some Turnover Is DesirableZero percent turnover is not desirable for a couple of reasons. First, if all employees stayed and the organization grew steadily, most employees would be at or near the top of their pay ranges and salary expenses would be extremely high. Secondly, new employees bring new ideas, approaches, abilities, and attitudes and keep the organization from becoming stagnant.
Truth No. 3: Turnover Is CostlyMost managers know that turnover is expensive, but two-thirds of 1,290 managers were unable to quantify the cost of turnover when asked in a recent poll. The cost of hiring and training a new employee can vary greatly—from only a few thousand dollars for hourly employees to between $75,000 and $100,000 for top executives. Estimates of turnover costs may range from 25 percent to almost 200 percent of annual compensation. Costs that are more difficult to estimate include customer service disruption, emotional costs, loss of morale, burnout/absenteeism among remaining employees, loss of experience, continuity, and “corporate memory.”