The True Cost of Turnover

Many companies view the recruitment process as separate from the rest of their business processes, and as a result, end up paying a lot more in the long run. To effectively measure the cost of turnover you must first assess the cost of the recruitment/retention process in its entirety.

  • Creation of Job Description
  • Creation of Job Ad
  • Posting of Job Ad
  • Screening
  • Interviews
  • Orientation
  • Training
  • Compensation and Benefits During Training
  • Loss of productivity
  • Client dissatisfaction
  • Reduced or lost business
  • Administrative Costs

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Think about how much you pay yourself, or the employee who will be managing this process and all of the people involved in every step of the employee life-cycle. This is the entire cost of turnover, and after the employee leaves, many of these steps have to be repeated. Some turnover is inevitable (and sometimes even desirable), but when it comes to your top performers you want to make sure you’re exercising your due diligence in hiring and retaining them.

The first step is identifying who your top performers are and what makes them the best. If your compensation and benefits package is competitive, and you have a great work environment, you DESERVE top talent. Don’t let an ill planned recruitment strategy or an internal process hinder your ability to attract and retain the best. Make sure your recruitment strategy is well developed, and your job ads and other collateral are strategically written and posted to attract star performers. Your process should include making sure employees have the hard skills, behavioural competencies and cultural fit they need to help you both be successful. You will want to properly communicate with your current leadership and staff to make sure you know if there are any issues inside your organization that may hinder retention. Recruitment is not an event that ends when a successful candidate is found, it is the first step in a process creating a long-lasting relationship between you and your new hire. A hasty or mishandled process sets the stage for problems in the future. 

About the Author

ProfileScott Keenan is a Recruiter for Priority Personnel Inc., with several years’ experience recruiting in both the public and private sectors in addition to marketing and social media roles. As a self-described professional cynic, he provides unique insight into modern recruiting from both the recruiter and candidate’s perspective. You can follow him on Twitter or connect with him on LinkedIn