Employee turnover exists at most organizations — whether they’re big, small, public, or private — and the type of turnover can be a combination of involuntary or voluntary, healthy or unhealthy. Reducing employee turnover requires management to analyze the root causes of turnover, which can vary dramatically based on circumstance. However, many companies don’t go through that introspective process, and, as a result, continue to deal with the cost of employee turnover, year after year. Many companies don’t know how much employee turnover costs them. If they did know, they would take a much more assertive approach in reducing turnover.
Employee turnover has a quantifiable impact in many ways, including the time it takes to rehire and train, customer disruption, paying overtime to existing employees, the potential to have more workers’ compensation and unemployment claims, and lower employee morale. The time to rehire and train can be the most costly, taking several weeks if not months of time, depending on how specialized the role is to fill — time that would otherwise be spent on core parts of the business. For instance, many HVACR companies will have a supervisor conduct field training that takes away from other areas of the business such as sales and client management.