I once read an article that outlined the cost of employee turnover. It also provided a long list of cost items related to turnover. This article really opened my eyes to the “fully loaded” cost of employee turnover. I’m not entirely sure that the numbers are true, but it stated that the cost of replacing one single employee was 100-150% of annual salary for a non-managerial person and 200-250% of annual salary for a managerial person. That may sound high but when you consider what goes into replacing an employee, you may think twice.

Consider the myriad of costs related to turnover. There’s the cost to fill the vacancy temporarily, the cost of lost productivity, the cost of an exit interview, the cost of administrative work, cost of lost training and the cost of impact on customers. Each of these costs may be minimal or significant, depending on the situation.

Next, consider the costs associated with severance pay and benefits, cost of lost knowledge/skills/contacts, cost of unemployment insurance, cost of recruitment ads, cost of interviewing, and cost of personality assessments/profiles. Are these costs real and do they add up? You betcha.

Now, consider the cost of drug screening, background checks, uniforms, security clearances, badging, keys, passwords, computers, phones, orientation and training. Do I have your attention yet? I hope so.

Finally, consider the cost of mistakes. New people make mistakes and sometimes they make big mistakes. I made a big mistake early in my career. My mistake cost $50,000. Thankfully, I didn’t get fired. In fact, the owner of my company told me I did the right thing because I was simply trying to take care of the customer, which was the company’s motto. Mistakes cost money.

Wouldn’t it be better to not have much employee turnover? Wouldn’t it be better to hold onto your people for the long haul? I think so. This is why we are launching GrowTheBench later this month. We hope you will check it out.

Your thoughts and comments are welcome. Please feel free to email me at phil@mypmcteam.com. I look forward to hearing from you.

Now go forth.