Download the New Hire Pocket Guide Top Reasons for Employee Turnover Low Compensation or Payīrian Kropp, Group Vice President and an HR Practice Leader at Gartner, noted that “The average increase in compensation for a worker who quits one job for another is about 15%.” The majority (44%) of respondents recently polled by Monster cited the need to earn more money as the main reason they are looking for a new job. Areas such as loss of productivity, customer dissatisfaction, and lost expertise are even more difficult to measure. It’s also important to note that not all turnover costs are tangible. One of the main reasons that the real cost of employee turnover is unknown is that most companies do not track exit costs such as recruiting, interviewing, hiring, training, and orientation. Losing good employees can also impact employee morale, productivity, and customer relationships. And in 2016, the SHRM Benchmarking Report found that the average cost-per-hire is $4,129.
A study by Employee Benefits News found that the average cost of losing an employee is 33% of their annual salary. Gallup reported that the cost of replacing an employee can range from one half to two times an employee’s annual salary. Losing employees is expensive, and there are several reports that reflect different estimates of the cost of employee turnover. And if this trend continues into 2020, as many as 33% of employees will leave to work somewhere else! Costs of Employee Turnover In 2018, the Work Institute reported that 28.6% of employees will leave their jobs for other opportunities. businesses are losing $1 trillion every year due to voluntary turnover, and the annual turnover rate in 2017 was at 26.3%. “Employee turnover” is the number or percentage of workers who leave an organization and are replaced by new employees.
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