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The Financial Cost of Staff Turnover

By September 23, 2011 May 6th, 2020 No Comments

With recent statistics highlighting that the cost to replace an employee can be as high as 150% of their annual salary (Mercer Consulting), it is clear that inspired, motivated and engaged staff can have a significant positive impact on your bottom line.

A recent visit to a prospective client highlighted this. The company employs 50 people and last year they experienced a 16% turnover in staff (8 employees). Based on the assumption above, and paying an average salary of $50,000, the cost to this Melbourne business was around $600,000!

Put another way, that represented around 6% of their revenue!

Implementing a reward and recognition program will not guarantee that you can reduce your staff turnover to zero. However, a well thought out and implemented reward program focused on corporate KPIs should have a major impact on staff morale, reducing staff turnover and improving customer service, while paying for itself many times over.

With a such a positive return on investment why would you not consider a reward program for your business?

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