How much does it cost to replace a member of staff who leaves? The answer obviously varies according to a number of factors, including the industry, the employer, the employee, and the context.
But Oxford Economics have attempted to calculate the average cost. According to their research (reported in Recruiter, 24 February) the average total cost is over £30,000 (£30,614, to be precise).
As specialists in talent acquisition and management, we were interested to see what proportion of that cost is made up of direct recruitment costs. According to Oxford Economics, such costs in fact make up only a small proportion of the total. Their data suggest that agency fees, advertising, interviewing costs, and HR processing costs together account for only about 6% of the total cost.
Typically, hiring temporary employees in the interim costs more (approx. 11%). But the biggest cost by far is estimated to be the (somewhat hidden) cost of remunerating new recruits whilst they get up to speed on the job.
Overall, the implication is surely that high turnover of staff could have a dramatic effect on a business’s productivity — perhaps more so than is commonly realised.