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employee turnover costs

Employee Turnover – What’s the Real Cost?

Employee turnover – it’s certainly something we’ve seen a lot of in government in recent months! The constant revolving door in politics has created a very public, highly damaging effect on the country. The fall-out of which we will experience for a long time to come.

The same applies to employee turnover in your business. What’s the real cost?

The obvious one – financial

Yes, you may be saving on a salary once your employee leaves. But there’s a huge cost associated with hiring a replacement. According to research published by Glassdoor, the cost of replacing an employee is around £3,000. And that’s if you do all the recruitment yourself. Plus, there’s the additional time it takes one of your team away from their core responsibilities. They need time to advertise, pre-screen, interview and onboard. So in reality, the cost, even when direct hiring, is considerably more than £3,000.

Additionally, if you have a hard to fill role; and let’s be honest, all roles are hard to fill at the moment, then it’s likely you’ll need to assistance of an agency. Fees are based on a % of salary, and this can prove costly.  However, the advantages of using an agency to recruit are 10-fold. Increased choice, insight and support can also result in greater employee retention. Therefore, saving you repeat recruitment fees in the future.

You may find our blog – 5 Questions to Ask When Choosing a Recruitment Agency of interest if you are looking to hire.

The productivity costs of employee turnover

Very rarely can you have someone in place before your current employee leaves. The average hiring process takes 28 days and then there’s the notice period to consider too. What do you do in the time in-between? We saw this play out in politics over the summer. Let’s go back to the resignation of Boris. Whilst he agreed to stay on in post until a replacement was found, what was the cost to the productivity of government? It seemed like everything ground to a halt.

In most cases, when an employee is working their notice, they are less committed to their job. And this can even start months before their resignation as they become less fulfilled and motivated. And even if you have the most dedicated employee, right up to their last day, what happens then?


As you wait to either recruit the perfect replacement, or wait for your new hire to work their notice, what impact does this have on the rest of your team? There are still jobs that need to be done. Who does those jobs? Your current team? Are you asking your team to take on extra work for no reward? There are only a certain number of working hours in a day. Asking your team to take on additional tasks can increase the risk for burnout. And that’s a whole other topic for another time.

And finally, what about the repetitional damage caused by employee turnover?

There are many different facets to this topic. When an employee leave, it can impact your reputation with your customers, your employees and even your peers. Think about the internal and external reputation of the Conservative Party – how has their employee turnover impacted them?

If your customers had a business relationship with your employee and suddenly, they are now longer there, what impression does this give? Are you a good company? Do you look after your staff? Continuity of service is everything to your customers. Managing employee transition can cost extra time and money. And even if your customers didn’t have direct contact the impact of employee turnover can still be felt. Will your lead times increase? Will you manufacture inferior quality goods due to extra demand on your current team?

When an employee resigns, this can also send shockwaves through your current team. Employees, even when happy in their role, may question if there may be something better out there for them too. It may exaggerate any frustrations they may have. It’s important that you take time to listen to your team. Especially when someone resigns.

You may find our blog 5 Top Tips to Improve Employee Retention an interesting read.

About PSi Talent

PSi Talent has been the technical recruiter of choice for many companies across the UK and Europe since 2012. We have built a reputation as one of the UK’s leading independent recruitment businesses.

We pride ourselves on the quality of the service that we offer to our customers, developing strong, ongoing relationships with our clients and candidates ensuring they trust us to meet their needs. Having built an unrivalled Customer Value Proposition for our candidates and clients we believe that we’re different to other recruitment businesses, many of our customers would also agree.

You can see their feedback in our testimonials.


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