How Much Does Employee Turnover Cost Your Business?

Nicola Mullineux

Nicola Mullineux


15 Nov 2018


A recent Glassdoor survey revealed that almost 35% of hiring professionals expected more employees to quit their jobs in 2018 than in 2017.

With ‘job hopping’ on the rise, what can you expect the cost to your business to be, and how can you prevent it?

What is the cost of employee turnover?

The cost of staff turnover depends on several factors. To calculate the loss, you need to take into account not just the cost of recruitment, but also:

  • Productivity loss
  • The time it takes for staff to become fully effective in their new role
  • Advertising costs
  • Agency fees
  • Cost of equipment (including uniform, badges/passes, desk equipment, etc.).

The average cost of employee turnover, based on the average UK salary, is around £11,000 per person.

For specialist roles, the turnover cost can be significantly higher due to the amount of time and money that you need to spend to train them. You must also consider the costs of specialist equipment or benefits, depending on your industry.

Senior members of staff will incur the highest turnover cost, due to their position, and the various costs involved. The cost to replace a senior staff member can be anything between £40,000 - £100,000.

What can I do to lower the cost of high staff turnover?

You must focus on improving recruitment and retention.

Recruiting a good hire is the best first step. An employee is more likely to stay if they’re well-equipped for the role they’re taking on. According to a number of recent studies, almost half of all new hires fail within the first 18 months.

Be honest and thorough when detailing a role; this way, the new recruit knows what you expect of them and can gauge whether or not they’re going to be able to fulfil the position’s requirements effectively.

Keep your induction precise and relevant.

If elements of the company induction are irrelevant to your newcomer’s role, it’s not only a waste of time, it can overwhelm the recruit and actually be detrimental to their integration into the business.

Cut unnecessary induction elements to make the employee effective in their role as quickly as possible. By doing this, you’re saving time, and encouraging them to focus on their role.

Finally, reduce the amount of factors making staff members want to leave.

You can’t control every element that causes staff to leave—some individuals will simply want to move on, while others will have legitimate personal reasons why they cannot stay. However, there are many more factors within your control that do help. The most impactful of all being workplace environment.

A recent Croner twitter poll set two of the biggest reasons people leave a new role against one another: pay & benefits and workplace environment.

Workplace environment took the lead by a small margin, suggesting that employees value a positive environment more than their pay. Creating a positive workplace environment is crucial for the wellbeing of your employees, and will have a massive impact on their decision to stay with your company.

Training line managers to support employees, and implementing an Employee Assistance Programme, are two effective ways of increasing employee morale.

Expert Support

For assistance with increasing employee retention, and reducing staff turnover, contact a Croner expert on 0808 145 3381.

About the Author

Nicola Mullineux

Nicola Mullineux, as Group Content Manager, leads a team of employment law content writers who produce guidance and commentary on employment law, case law and key HR developments. She has written articles for national publications for over 10 years and regularly helps to shape employment of the future by taking part in Government consultations on employment law change.


Nicola Mullineux

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