It’s no secret that employee turnover comes with an excess of expenses. But most people only know about the obvious expenses—there is a whole list of hidden costs you might not be considering. While they might not call for literal payment, these costs do exist and can drain your organization’s dollars unknowingly. Toronto-based human resources consultant Tom Armour has given a name and description of each of these hidden costs.
Lost credibility – Employee turnover costs management in two ways: an environment of excessive turnover can easily lose credibility, and current employees can get demoralized by the amount of people coming and going and may decide to leave as well.
Ripple effect – Employee turnover causes not only the management chain but also the coworkers to become less productive. This is due to management’s new pressing responsibility to find new employees and coworkers’ new pressing responsibility to pick up the slack left by former employees.
Slippage – The work that isn’t getting done when an employee is missing costs you. Production delays, lost sales, and other neglected responsibilities of the abandoned role cause your company to lose potential money.
Customer loss – When an employee leaves, they take their experience and customer service with them. Customers can easily become impatient and unsatisfied when constantly having to deal with fresh faces and new hires—who might not have the same level of expertise as the previous employee—and quickly lose interest in your organization.
It’s pretty clear that employee turnover is highly detrimental to any organization. Put forth every effort to retain your talent to avoid the nightmarish costs and struggles of employee turnover.