The Cost of Employee Turnover

9 thoughts on “The Cost of Employee Turnover

  1. I’m sorry, where are you getting 400% for employees making $120K? Everything I’ve found so far shows a cluster around 10-30% of the employees salary, including executives. Perhaps you’re adding an additional cost not sited in those studies. I will also be leaving a note on the original article.

    Not that 10-30% is something to dismiss, I just prefer to know the source behind statistics before I share them.

    1. I also responded on LinkedIn but I will post here as well. $120K is an arbitrary number – it could be anyone with a senior salary in a senior position. The 400% is an aggregate of a number of different studies I looked at when research this. If you’re only seeing 10%-30%, I have to say that seems incredibly naive and can’t possibly encompass all of the impact of an executive leaving. Just think about the impact of a senior person leaving a company: recruiting a replacement, on boarding the replacement, all of the staff/structural changes that the replacement will inevitably want to make, the middle/jr staff you lose because they follow the executive, the decrease in morale because of the loss which leads to a decrease in productivity across the staff that was impacted, lost opportunity cost all around. And that’s a very short list of the potential impact but it’s still something that 30% could not possibly cover.

  2. The article implies that you can retain employees by giving them more money. A lot of studies show (and maybe some people know the feeling) that a raise gives only a short-term motivation and plays just a minor, however important, role in sustainable job satisfaction. Replacing a person costs a lot of money, no doubt about that. But I question the fact that more money will prevent people from quitting their jobs – more satisfaction does.

    1. Hi Martin,

      I agree with you wholeheartedly – money is just one of many many factors at play and I do not think you will retain a person long-term purely by bumping their paycheck. What I am saying is that it changes the conversation about how a company invests in other measures to keep their employees happy.

    2. Jonathan Cortes

      Money doesn’t play a minor role, it’s still one of the main reasons an employee leaves a company. Satisfaction encompasses multiple variables: pay, manager, culture, personal development, and so on. Since pay is a variable, not increasing pay leads to reduction in satisfaction overall.

      “Money Talks”

      1. Jonathan, if money was such a major factor than the person wouldn’t have accepted the job in the first place. When you look at root causes, money is rarely the core reason.

  3. Hello! I’m curious as to where you found these statistics:
    For entry-level employees, it costs between 30% and 50% of their annual salary to replace them.
    For mid-level employees, it costs upwards of 150% of their annual salary to replace them.
    For high-level or highly specialized employees, you’re looking at 400% of their annual salary.

    Overall, enjoyed the article. Very informative and helpful!

    1. Hi Jessica,

      To be honest, I wrote this article about two and a half years ago and at the time I did a lot of research into the topic, and did an aggregate of multiple sources for those percentages. I made the mistake of not documenting what those sources were, so I don’t have them on hand anymore. But spend some time in Google and you’ll likely find some of the same materials I did. Wish I could be of more help!

      1. Andy Palmer

        I really enjoyed the article and like many others am trying to find hard details on the cost of turnover. A shame you were not able to recall the sources for cost in terms of % of annual salary as I really wanted to use them in my current project where I created a model to predict the probability of resignation 🙁

        I’ve searched around and found huge variation in figures from 20% up to 150%

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