In an economy where employment is high, attrition is also on the increase and competition for talent is fierce. At an average UK attrition rate of 15%, this poses a huge cost to organisations and with this knowledge, it’s more important than ever that companies measure, monitor and understand why their employees are leaving and work out what it will take to retain their top talent.
What are the benchmarks?
Leading research stats suggest that one of the top three reasons employees either leave their company or accept a role with a company is work-life balance (WLB). We’ve identified three separate pieces of research (LinkedIn, Onrec and Bamboo HR) which consistently indicate a massive 30% of employees that leave, do so due to work life balance.
How much does it cost?
This figure includes direct costs such as advertising, recruitment/ placement fees (averaging at around £5,433), and incorporates the cost (wages) of a new employee that are spent before they reach full productivity, which is between 4 and 12 months depending on the role/ sector plus management time office set up etc. However, it doesn’t include the indirect impact of disengaged employees which can happen when someone leaves and may lead to increased sickness/ absence costs.
This figure of £30,000, may seem high to employers if not all elements are counted as part of replacement costs, perhaps because they are considered an overhead or a necessary cost of running the business?. However, with new recruits taking an average of 27.6 days of HR director time to hire and get up to speed (Onrec), plus onboarding, training and simply paying a recruit before they are productive and the costs soon start to pile up. Overall, this is a significant cost to businesses of all sizes;
- If your company employs 10,000 staff and you have an attrition rate of 8.5%, this could translate into an annual cost of replacing staff that leave due to WLB of £7.6 million.
- If your company employs 250 staff and you have an attrition rate of 10%, this could still translate into an annual cost of replacing staff that leave due to WLB of £180,000.
Use our calculator to see how much regrettable attrition due to WLB could be costing your business.
Could it be that viewing the full cost of recruitment as an uncontrollable overhead is in fact, costing businesses millions of pounds?
Could focussing on retaining top talent that may leave due to work life balance priorities add a quantifiable, direct cost saving to the business?
Why do your employees leave? do you know and track the cost impact on your business?
I hope you find our calculator useful and thought provoking. Please let us know your comments on these numbers and whether you think this is a priority that is receiving enough investment and attention.