Hidden Costs of Losing Employees

Employee attrition is more costly than many realise, with several companies focusing on attracting talent rather than retaining it. Here are the hidden costs of attrition and how to address them. 

Decreased Productivity

When an employee leaves unexpectedly, it disrupts operations and reduces productivity. Remaining team members struggle to meet goals, leading to delays and lost revenue. Recruitment slowdowns during economic downturns exacerbate these issues. 

Employee Burnout

Understaffing forces remaining employees to take on extra work, increasing burnout risks. Surveys show that 41.1% of employees experience burnout due to understaffing. This not only reduces productivity but also leads to further attrition, creating a cycle of burnout and turnover.

Loss of Institutional Knowledge

Departing employees take valuable, undocumented knowledge with them. This loss hinders new hires who must rebuild expertise, slowing productivity. Effective documentation and knowledge sharing are critical to mitigate this risk.

Recruitment Process Costs

Replacing an employee can cost three to four times their salary, including recruitment fees and the time existing employees spend on hiring activities. This detracts from their core responsibilities and adds to the overall cost of attrition.

Induction, Training, and Onboarding Costs 

Onboarding new hires is time-consuming and expensive, often taking several months to a year for full productivity. There’s always the risk of a mis-hire, which can double these costs if the process needs to be repeated.

Understanding and addressing the hidden costs of employee attrition is crucial. By prioritising retention through a supportive work environment, proper documentation, and addressing burnout, companies can save significant costs and maintain productivity.