Typically the effect of losing a valued employee is equivalent to a year’s salary, once you have taken into account all the direct and indirect costs, disruption to others and the loss of goodwill.
When employees resign from companies, costs are incurred in recruiting new employees and training them. Productivity will be lower until new employees learn the business.
If it is a customer-based business, customers could be dissatisfied if the new employee is not proficient. The business could lose customers who are dissatisfied with service.
With UK absenteeism running at approximately 10% and attrition levels anything up to 25% even small changes can have a big impact on the company’s bottom line. To decrease attrition, managers must understand the causes of customer and employee turnover, the costs associated with attrition and, finally, institute measures to improve employee morale and reduce attrition rates.
Further reading:
A look into the real costs associated with losing an employee
A concise article looking at why companies may experience attrition
Why your employees are leaving you and how to keep them
