Few business leaders or organizations really understand the full cost of employee turnover. I was speaking to a manufacturing supervisor via LinkedIn who revealed that last year, he had to replace over 120 workers. Yes, one hundred twenty! When I asked him the approximate cost to his organization, he had no idea. Maybe after reading this info graphic, he might get a closer picture of the true cost of employee turnover. Replacing 120 line workers could cost as much as $576,000. What would a 20% decrease in that loss mean to his division … or to his bonus?
- Average cost to replace an $8/hr employee = $3,637 (Coca Cola) to $11,609 (Cornell) with an average for the ten lowest being $5,505
- Average cost to replace a $30,000/yr employee = $4,800
- Average cost to replace a $50,000/yr employee = $9,850
- Average cost to replace a $75,000/yr employee = $15,300
- Average cost to replace a $250,000/yr executive = up to $532,500
Why the similarity between an $8/hr employee and one making $30,000 per year (about $15/hr)? There are a lot of fixed costs with replacing employees, costs that most organizations do not budget.
Although I haven’t found the actual study online, I’ve run across multiple websites that claim either Harvard University or the Harvard Business Review found that “80% of employee turnover stems from mistakes made during the hiring process.” That is actually believable so, if you or your organization are interested in doing something about the high cost of employee turnover, our contact information is at the bottom of this info graphic and the bottom of this article. We may have a possible solution that saves your company a great deal of money by insuring you hire the right people in the first place – people who’s natural tendencies and preferences match the job.
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Certified as a Professional Behavioral, Motivators, and Emotional Intelligence Analyst, Ron Haynes specializes in using the science of TTI’s TriMetrix HD to help companies select and develop their top talent, create job benchmark solutions, and implement succession planning.
Need a solution to your employee challenges? Contact him at email@example.com or at 870-761-7881.
Original article by Ron Haynes.