We found in The Real Cost of Employee Turnover that the #1 challenge faced by Human Resource teams is Employee Turnover.
For almost all positions that require specific skills - the median cost of turnover was 21% of the departing employee’s salary. Unfortunately, the actual costs of employee turnover are rarely seen in standard accounting practices - but we know they exist because they can be easily identified. Things like lost company knowledge, culture impacts, replacement recruitment costs, new employee training costs and lost productivity during the new employee onboarding ramp-up period.
Does this make sense for your company? It was a common question we were asked, so we created a simple tool for you to use.
Employee Turnover Calculator
The Employee Turnover Calculator is a google sheet that you can use to calculate the real cost of employee turnover for your company.
Wondering how you can use it?
- Open the Calculator
- Click 'File' and 'Make A Copy' to save your own version
- Adjust cells in orange fade (the assumptions)
What are the template assumptions?
The Employee Turnover calculator accounts for basic employee turnover through its four key components:
- Departing Employee Offboarding: the costs your company incurs through the departing employee, coworkers and manager focusing on the knowledge transfer.
- Vacancy Costs: the costs the coworkers and manager incur juggling the new responsibilities while the manager finds a replacement.
- New Employee Recruitment: the costs for the job postings and manager finding the new hire.
- New Employee Onboarding: the costs of onboarding the new employee, transitioning the tasks from coworkers and manager oversight.
On our base assumptions - we found that employee turnover costs are ~32% of the departing employee’s salary.
Every company is different and our numbers are not meant to be taken as right for everyone. We encourage you to invest 5 minutes with the calculator to understand the real costs of employee turnover for your company. Providing a great employee onboarding experience can go a long way towards decreasing employee turnover.
What this means for you
The ability to find, develop and retain a strong team in today's market is huge competitive advantage, and can avoid an enormous amount of employee turnover costs - both those seen and unseen. It's mission-critical that Human Resources and People Operations teams pay keen attention to employee issues and concerns, and address them proactively to avoid the hidden costs of employee turnover that can kill company ROI. Now with the abundance of employee experience and engagement solutions available - it has never been easier to provide great experience to employees and support their well-being.
Providing a great employee onboarding experience can go a long way towards decreasing employee turnover. Want to learn more about building better connected, more engaged, and higher performing teams?
Download the Sapling Guide to Employee Onboarding Success, or sign up for a free product demo below.