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Reduction in employee turnover is just one factor in calculating the return on investment from conducting an employee survey. Losing high performers is not only a "brain drain" of your company's human capital, it also carries with it direct and indirect costs from the replacement of the very employees you should be making efforts to retain. Studies have estimated direct turnover costs per employee to be 25-30% of an individual employee's salary/benefits package, with hidden costs inflating that figure substantially.

Investing in solutions that result in even a small reduction in your company's turnover rate can realize substantial reductions in turnover expenses over the long term.

Number of employees Average annual salary
Annual turnover rate
U.S. average = 15%
%Benefits as % of salary
Turnover cash cost
U.S. average = 25%
 

How are average turnover costs calculated?

Studies by the University of Wisconsin Extension identified many direct costs associated with employee turnover. Examples are: Separation pay, termination and hiring administrative costs, exit interviews, employment advertising, employee pre-screening, interviewing, assessment testing, background checks, travel costs, moving expenses, signing bonuses, medical exams, formal and informal training time, employment literature and manuals, and a new employee's learning curve.

All these are figured into the average 25% of salary estimate while at the same time recognizing your indirect costs may, in fact, make this number higher.



  

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