CALCULATE YOUR OWN COSTS - What is your turnover costing you?

The Costs of Employee Turnover for Your Organization

The Society for Human Resource Management recently reported that it costs an average of over $7,000 to hire an employee. If your dealership or organization loses/replaces 15 sales people per year (average high turnover environment loses at least this amount with a full staff of 15), your annual turnover cost is a minimum of $105,000. This does NOT include lost opportunity as a result of wrong hire decisions. With these costs it will pay to implement some fail safe processes to decrease turnover, especially if they're steps that can be implemented at no- or low-cost.

YOUR COST     PREVIOUS YEARS NEW HIRE TOTAL   X   $7,000   =   YOUR ANNUAL TURNOVER COST

Four primary areas of tangible turnover costs:

• Separation costs (clerical time, exit interviews, etc.)
• Replacement hiring cost (ads, pre-screening, interview time, reference checks, background and drugtesting)
• Costs to train new hires (on boarding time, product training, process training)
• Costs of lost productivity (ineffective performance, learning handicap, wrong hire performance)

Secondary tangible costs include:

• Corrective meetings to improve poor performing employees before he/she leave or are terminated
• Cost of management staffs time spent addressing, documenting and/or correcting poor performance