Few organizations really understand the full cost of employee turnover. I was speaking to a supervisor for a manufacturer on LinkedIn (connect with me on LinkedIn) who revealed to me that last year, he had to replace over 120 workers. When I asked him what that cost, he had no idea. Maybe after reading this info graphic, he might get a closer picture of the true cost of employee turnover.
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
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 allow for in their annual budgets.
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, my contact information is at the bottom of this info graphic and the bottom of this article. I may have a possible solution that saves your company a great deal of money.