Early Measurement of Effects of Hiring Differently in a Credit Union
Especially in financial services, the secret to hiring better performers is all in the numbers (go figure).
What is Your Organization's Cost of Turnover?
We compiled a collection of Cost of Turnover studies for you to use as a guide. The HiringSmart Cost of Turnover Calculator formulas are based on the average costs from the independent research listed below. If your organization is look to reduce turnover, consider using a pre employment assessment tool that has proven to reduce turnover up to 60%.
Source |
Turnover Cost of an $8/Hour Employee |
Turnover Cost of an $80K Salaried Manager |
Documentation and Supporting Material |
Society for Human Resource Management
|
$3,500 |
$70,000 |
Uncovering turnover costs can be a wake-up call, as it was for Walter Kalinowski, Director of HR for a company with 53 truck plazas. "We were hiring 200 employees per pay period. It was out of control. We had trouble finding people," said Kalinowski. He discovered his per-employee turnover cost was $3,500.
|
Coca-Cola Retailing Research Council |
$3,637 |
$72,740 |
A major study of the employee turnover problem in the supermarket industry estimated total direct and indirect costs of replacing a supermarket cashier earning $6.50 per hour was at least $3,637.
|
Cornell University Hotel School
|
$5,688 |
n/a |
Front Desk clerk, Miami hotel.
|
Legislative Update, Alaska State Senator Kim Elton
|
$8,000 |
$100,000 |
Hiring and training a new employee can cost from 50% to 200% of the position's annual salary.
|
Hay Group study
|
$8,000 |
$120,000 |
The cost of replacing workers range from six months of an hourly worker's salary to 18 months salary of a professional employee.
|
Workforce Magazine – Survey on Employee Turnover
|
$10,000 |
n/a |
45% of responding companies indicated that turnover costs are more than $10,000 per employee. |
Cornell University Hotel School Study
|
$11,609 |
n/a |
Front desk employee, Hotel in New York City
|
Saratoga's Human Resource Financial Report
|
$16,000 |
$104,000 |
Average turnover cost equals one year's salary and benefits. This can vary widely, depending on industry, with costs much higher for retail.
|
Bliss & Associates Inc., Wayne, NJ consulting firm
|
$24,000 |
$200,000 |
Costs of lost productivity are as important as direct costs, such as advertising or temporary staff. Total costs easily reach 150% of the annual compensation. The cost will be significantly higher (200% to 250%) for managerial and sales positions.
|
Research Average – Cost of Turnover, per departing employee
|
$9,523 |
$108,963 |
|
Research Average – Percentage of annual salary
|
60% |
136% |
|
Especially in financial services, the secret to hiring better performers is all in the numbers (go figure).
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