Firms have long understood that losing staff is a key risk to success, but the financial cost of staff turnover has received little attention.
Working with Unum, this report analyses the financial impact of staff turnover across five key sectors (IT/Tech, Accounting, Legal, Media/Advertising and Retail). These costs are split into two main components. Firstly, and most importantly, is the cost of lost output while a new worker gets up to the standard expected of them (“optimal productivity”). The second, which is probably more familiar, is the logistical cost of finding and absorbing a new worker.
These costs vary substantially across three key variables – the sector in question, the size of the firm hiring a new employee, and the background of the worker being recruited.
Our report for Unum used a bespoke survey dataset as well as official data from the Labour Force Survey to analyse the costs firms in five key sectors face when they replace professional workers. The report attracted extensive national press coverage, including in the Financial Times, the Independent and the Telegraph, as well as in several recruitment and HR related publications.
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