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Updated: April 24, 2025
When an employee walks out the door, it can cost your company more than you might expect. Replacing a single team member can run anywhere from 50% to 200% of their annual salary, depending on the role. And we’re not just talking about hiring expenses—the ripple effect touches productivity, morale, and your bottom line.
Factor in industry turnover rates that can climb as high as 60%, and it’s easy to see how these costs add up quickly. But here’s the good news: with a few proactive strategies, you can reduce turnover, retain top talent, and build a more resilient workforce.
Let’s break down the true cost of employee turnover—and how to get ahead of it.
Calculating the Cost of Employee Turnover
Before you can fix the problem, it helps to understand where your money is going. Turnover costs vary, but here are the major areas where your budget can take a hit:
Hiring Expenses
According to SHRM, the average cost of hiring a new full-time employee is around $4,700. That includes job postings, interviews, background checks, and time spent by your recruiting team. For senior or hard-to-fill roles, those costs can climb even higher.
Lost Time & Productivity
Every day a role goes unfilled is a day of lost output. Plus, most new hires need 3–6 months to ramp up to full productivity. If it takes six months, you’re effectively losing half of that salary in value.
Training Costs
Getting new hires up to speed takes time, tools, and resources. Companies spend an average of $954 per learner each year on training, not including manager time or materials.
Temporary Staffing & Overtime
While you’re backfilling a role, someone still needs to get the work done. That often means paying overtime or bringing in temporary support—both of which can strain budgets and teams.
Want a quick reality check? Add up these numbers across just a few roles and it’s easy to see how employee turnover costs can quickly spiral. But here’s the good news: it’s also largely preventable.
Why Employees Leave—And What to Do About It
Conventional wisdom says that employees change jobs to increase their pay. That’s not always the case.
While compensation (e.g., low salary, few employee benefits and perks, no stock options or 401(k) match) does often play a part in the decision to leave a job, research continues to show that pay is not the most important driver. Other factors — including communication, leadership, workplace environment, and a lack of appreciation for their work — are cited far more often.
While salary matters, it’s not the only reason employees leave. These common drivers could be pushing your team toward the door:
- Lack of growth opportunities
- Poor management or leadership
- Unclear expectations or feedback
- Burnout and work-life imbalance
- A disconnect between company values and culture
The good news? Many of these factors are within your control. When employees feel supported, challenged, and aligned with your mission, they’re more likely to stick around.
5 Proven Ways to Reduce Employee Turnover
Now that you know what’s driving turnover (and how much it’s costing you) here are five employee retention strategies to keep your team happy, engaged, and sticking around:
1. Build a Strong Employer Brand
Your employer brand is how both job seekers and current employees perceive your company. A clear, authentic brand builds trust and helps attract people who are a good fit—which leads to better retention down the line.
2. Nail the Onboarding Experience
The first few weeks set the tone for the entire employee experience. A thoughtful onboarding program helps new hires feel welcomed, supported, and confident in their roles—boosting engagement from day one.
3. Invest in Internal Mobility
When people can grow within your organization, they’re far more likely to stick around. A solid internal mobility program turns your team into a built-in talent pipeline and boosts morale across the board.
4. Create a Brag-Worthy Culture
Company culture isn’t just about perks. It’s about feeling connected to the work, the mission, and the people. Encourage feedback, celebrate wins, and make sure your values are more than just words on a wall. Remember: 54% of employees would take a pay cut to work at a company that shares their values. That’s culture in action.
5. Empower Your Team with the Right Tech
Outdated tech and clunky processes can lead to frustration and burnout. Make sure your people have the tools they need to do their best work — whether that’s collaborative platforms, automation tools, or flexible scheduling software.
The Bottom Line
The cost of employee turnover is steep—but it doesn’t have to be inevitable. When you understand the full picture and invest in the right retention strategies, you’ll see stronger performance, better morale, and a healthier bottom line.
That’s where Jobvite can help. From attracting the right talent to building a better candidate experience, our platform is built to tackle the cost of employee turnover head-on.
Ready to build a stronger, more resilient talent strategy? Book a demo to see how Jobvite helps you hire and retain with confidence.
