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How do I measure the cost of people leaving?

The cost of employee turnover will vary enormously from business to business.

A recent study put it at around £12,000 per employee to find and recruit new staff and get them up to full productivity.


For a senior position, this loss could be a lot higher, whereas for a casual position the figure is unlikely to be anywhere near that.


You can start to build a picture of how much it is costing your business by adding up things like:


Cost of resignation – admin and HR costs Recruitment costs – advertising, costs of running recruitment, interviewing time, agency costs etc.Temporary staffing – cost of covering the post while the vacancy is open Onboarding – induction and training costs for your new employee Productivity loss.


6 reasons why employees leave their jobs


Employee turnover isn’t always a bad thing – if the person leaving wasn't the right fit for the role, you may find you get someone far more suitable through the door to take their place.

However, if you notice a high turnover rate in your business, it could be time to dig deeper and look at the reasons why people leave. Overlook this and your bottom line could take a nasty hit.


Here are 6 reasons why people may hand their notice in and pack up their desks.


1. Their workloads are too much

Having too much work to do can be a major demotivating factor for anyone.

According to one study 70% of employees feel there aren’t enough hours to do their job and many quit for a better work/life balance. 

Make sure you're encouraging your people to take their full holiday allowance, allow them to work flexibly and if you notice they’re overworked, consider bringing in more staff or freelancers to help cope.


2. They were offered more money

Being offered a bigger salary is another major reason people leave. 

If you can match what they’re being offered, then you might be able to persuade them to stay, but if the quality of their work or productivity doesn't match the rise in pay, it may not be the best decision for the business. 

But, with the amount it costs to replace workers, you’re better off reviewing their pay annually and giving them regular pay rises if you do want them to stay.

One study by Glassdoor found that a 10% pay increase raises the chance of them staying by 1.5%.


3. Company culture

Cultural fit is important and an area that is sometimes overlooked.

But if your company culture is negative rather than positive, then expect to see a high turnover rate.

If your employees are happy, the environment is good and they feel valued, they're more likely to stay put.

If you’re not sure how your employees feel, anonymous satisfaction surveys can be a great way to find out how people really feel and get to the heart of issues quickly. Once you know where the issues with your culture lie, you can take steps to improve them.


A great way to commit to your company culture is by joining the Breathe Culture Pledge email bcp@nmshr.co.uk for more information. Over 460 SMEs have already joined and taken steps to strengthen their culture. Join today for free.


4. Lack of development opportunities 

Salary is important, but it’s not the only reason people quit. If there's no opportunity for progression, they will also walk.

According to a Gallup poll, 32% cited lack of promotional opportunities as one of the main reasons for leaving.

Employees want to develop professionally, gain more skills and progress up the company ladder - so make sure you provide them with adequate opportunities so they don't feel like they're in a dead-end job.


5. Lack of recognition/reward

Don’t underestimate the power of saying "thank you".

Employees like to know their work matters and that it has purpose. Simply recognising that they are doing a good job can help employee retention. It doesn’t have to be expensive either – getting managers to say thank you, offering monthly rewards or even giving them a shout out on social media when they go above and beyond can all foster a better and more attractive working atmosphere.

Breathe's Kudos tool was designed for exactly that - giving praise and recognising a job well done. 


6. They didn't get on with their boss

If a number of employees with the same boss all start to leave at the same time, then you can be pretty sure it is something to do with their relationship with them.

Around 75% of people quit their jobs because of clashes with their boss, so it’s up to you to make sure your management team is engaging people rather than pushing them away.

Managers should be mentoring, training and inspiring people rather than micromanaging them and demotivating them.


Speak to one our team to learn how Breathe & NMSHR can help.

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