The Costs Of Employee Turnover: Replacement
An unexpected departure from an employee can leave owners in a tight bind. Recruiting and hiring a new employee is a big undertaking for any company. Just like employee separation, the replacement process can cost your company a lot of time and money.
The Costs of Employee Replacement
Employees leave companies for any number of reasons. No matter the situation, their replacement won’t be cheap. In fact, it can cost up to 50 percent of an entry-level employee’s annual salary to find a replacement. That percentage goes even higher for employees with more experience. Replacing one employee can be costly enough. Hitting a period where you have multiple employees leave around the same time can really hurt the company coffers. Just a few departing employees can potentially mean hundreds of thousands of dollars in replacement costs.Why Replacement Takes Time
Even if you’re looking to replace someone quickly, it’s important to try and find the right person for the job. That means spending time to go through the hiring process. Necessary but time-consuming replacement costs during this time include:- Recruiting applicants
- Entrance interviews
- Employment Testing
- Pre-employment administrative expenses
- Medical exams, drug testing, background checks
- Training costs