Workplace Relationships
Productivity through people
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What is the REAL cost of staff turnover?

You have your own business, and finally beginning to get ahead. You’ve even had to take on more staff to deal with the growing workload…

And then…

one of your employees says they are leaving!

At first you may be hurt “How could she not want to work here?”, maybe worried “She knows all the customers, what if she becomes a competitor?”, you may even feel to blame “Did I do something wrong?”.

However, once the dust settles, you will probably shrug and decide that you can find someone else, no big deal – it’s just an advert on a jobhunting website and a couple of days looking at resumes, right?


The cost of losing an employee can run into the thousands!!!! If you’re based in Australia, I highly recommend you check out Business Victoria’s Staff Turnover Calculator. It will show you that if you employ 2 staff at a cost of $25 per hour and one leaves…potentially, that is costing you $23,761.


Simple, the time and money you invested in recruiting and training the person. The lack of productivity once they’d decided to leave (realistically, most people have one eye on the door, once that decision is made and notice is being served). Then there is the time lag between them leaving and a new person – if you can find a quality replacement – beginning work. Productivity will be down if you are short-staffed.

Of course, no new employee walks in perfectly trained for YOUR conditions, so a settling in period where other staff may be taken away from their core duties to mentor the newbie will also attract a cost.

And so you see…the cost of losing staff can really add up!

What can employers do about it?

You are always going to be at risk of staff leaving. The business may be your ‘baby’ but very few employees will care to the degree that you do – nor should they! Life changes in your employees’ lives will always impact the workplace, with the most significant impact being leaving the company altogether!

The best way to try and negate this happening is to consider the engagement and input your staff have in the workplace. There are numerous articles and surveys illustrating the need that staff have to have meaningful work. Therefore, asking, listening and valuing their opinions about what to do and how is immensely powerful.

For this, you need to build trust that establishes free flowing, open conversations. Continuous feedback conversations that flow from boss down and employee up are central to this process (see free eBook series).

Another strategy I work with leaders on is of course hiring correctly in the first place. Having the right team member join an established group can be tricky to manage, and you should be prepared to devote time to this, as it will save you more time (and costs) further down the track if you do! Attitude is the primary attribute you should be looking for in hiring an employee. If they have 70% of the skills you want and a great attitude, offer them the job! This is the perfect fit. If you hire someone who has everything, they could get bored and unfulfilled quickly. However, if the role has a potential to expand with the employee, they might be perfect! Basically, attitude beats skills as long as the applicant has the minimum requirement to do the job, and the drive to learn the rest.

Getting to know your team, beyond their current role and learning other skills they have may allow a shift sideways into a better role for them and you! Leaders / managers should always be asking what the plans of the employee is for the future. A retailer may have an awesome shop assistant that wants to move into marketing in the future. By supporting this dream and giving them experience within your organisation if possible, they may actually stay longer at your company, as they don’t feel they ‘have’ to leave to be seen a different way.

Thank your employees

It may seem obvious, but from the conversations I have, many people are never thanked by their boss. Showing gratitude for a job well done, or a situation well dealt with, is as important today as ever! It seems sometimes, we forget to do this simple thing as there is no ‘like’ button on a person! Even if you forget in the moment, a quick call, text or even email to acknowledge the work they put in can be enough to soften the heart of the prickliest employee. Notice I refer to effort not result. Sometimes it’s easy to get a result, but usually it takes a lot of effort and there may not be anything ‘whiz-bang’ to show for it. Whilst results are important in business, if there is no effort you are unlikely to get anywhere!

To re-cap, staff will come and go! Your leadership style, the way you embrace your employees and the workplace culture you develop will all contribute to how long they stay for. Keeping your best staff is something you need to put effort into consistently so they care as much about your business as you do – well, nearly!!!

Jo O’Donovan is the founder of Workplace Relationships, based in Melbourne. She works with companies to increase their productivity through focusing on their culture, people and relationships. Jo has a particular passion for improving the mental health of employees through developing the human connections within organisations and her new online course on Mental Health In The Workplace can be accessed here.

Are you a manager who needs to know how to have a mental health conversation? Access our manager course here

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