The Cost of Turnover – The Value of Engagement

Minimizing turnover is significantly more cost effective than churning through new hires. In a knowledge-based economy, corporations and products are increasingly specialized, so retaining experience and brain pool does count heavily.

When looking at the cost of turnover one should look at the total cost model. Direct costs and opportunity costs are to be factored in.

Costs to off-board employee
+ Cost to hire replacement
+ Transition costs
+ Costs related to disruption of talent pipeline and dip in motivation

= Total costs of turnover

On average it is estimated that turnover costs are between 150 % – 300% of the base salary of the lost employee.