What's The Real Cost of Attrition?

We’re breaking down the real financial costs and hidden opportunity costs of attrition, plus a highly effective strategy for reducing employee turnover.

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The financial costs of attrition

Hiring for a particular role will usually cost you between 30% and 50% of that role’s salary. Put in concrete terms, if you’re looking for a marketing specialist and planning to pay $65,000 a year, you’ll probably spend $19,500-$32,500 on recruiting.

And that’s just for one role. The Bureau of Labor Statistics says that the employee turnover rate for most companies is around 12-15%. Whether you have a dozen employees or a thousand, those recruiting costs can add up fast.

There are other business costs as well. If you’re down a salesperson, you’re losing the leads and wins that would be managed by that role. If you’re down an engineer or a consultant, you’re losing a lot of billable hours. Between these lost revenues and the direct costs of recruiting, attrition is expensive for companies. 

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The other costs of attrition

You spend more than just money when you’re trying to hire people. There are countless other costs that are virtually impossible to quantify, such as:

• Lost momentum. Let’s say a role goes unfilled for four months. That’s four months of progress you’re losing on any projects or initiatives that role is responsible for. And it’s not like you’ll be right back on track once you finally hire someone. With training and onboarding, it can take weeks or months before your new hire is ready to reboot that dormant project.
• Lost time. Think about all the tasks and meetings that go into hiring. Recruiting, reviewing resumes, interviewing candidates — that all adds up to time you’re not spending on other things.
• Lost team progress. If you’re short a team member, you might have to rely on other team members to pick up the slack. That takes them away from their own responsibilities. As a result, important long-term projects can fall to the wayside in favor of urgent work.
• Lost morale. Whether you’re two people doing the work of three, or eight people doing the work of ten, being short-staffed is exhausting. Even the temporary stress of being a too-small team can wear on people.

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So what’s the solution?

Here are a few stats from our friends over at Kazoo:

• 83% of employees believe their company should support their career development, recognize them for good work, and provide opportunities to learn new skills.
• Only 44% of employees believe their current employer is capable of delivering those things.

In other words, employees are excited to get better at their jobs and grow as professionals. If you, as an employer, can demonstrate your commitment to supporting this desire, you can really stand out in a competitive hiring market. If your employees feel like you’re invested in them and their career growth, they’re less likely to leave for another company.

You can get started by partnering up with Trivie. We can help you design custom training for individual employees and specialized teams, so you can create the specific learning opportunities they want. This is a powerful way to inspire loyalty and build morale.

You can also use Trivie to prepare your team for the challenges of being short-staffed. Trivie is great for cross-training and reskilling, so your team can learn the skills they need to adapt seamlessly if someone leaves and they need to cover extra duties for a while.