Staff Turnover Costs

  • Sep 13, 2021

Personal turnover refers to the relationship between admissions and deprivation of rights of occupations that occurred voluntarily or involuntarily, in a given period. It can be affirmed that the rotation of people significantly influences the processes and results of companies, which is a very important aspect of organizational dynamics.

It is important to know the aspects of rotation, since it is a phenomenon that generates costs and tension in the companies, it is necessary to detect the causes and determinants that lead to staff turnover to avoid problems greater. The cost of staff turnover is often not known to the organization and therefore not controlled. Therefore, this work aims to obtain the answer to the following problem: What is the financial impact of staff turnover in a micro-enterprise in the educational segment?


Due to the great competitiveness, companies increasingly seek to reduce staff turnover. Rotation refers to the voluntary or involuntary admissions and dismissals of professionals.

People management has undergone important changes in recent times, as a result of high advances in technology, and this directly affects company turnover, as people have quick ways to get information, competitiveness for positions also becomes a obstacle.


staff turnover costs

In this article you will find:

Division of staff turnover costs

Chiavenato splits costs related to turnover in primary, secondary and tertiary.


Primary costs

The primary costs are those directly related to the dismissal of the employee. For example, dismissal expenses and the selection of a new employee, training and integration expenses, the cost of the time for people involved in HR, in addition to the legal costs related to the dismissal of the employee.

Secondary costs

Secondary costs involve intangible aspects, that is, what cannot be touched. Refers to the immediate effects of turnover, such as losses in production, while a new employee does not replaces the one who leaves, less production until the new employee adjusts, and influences others employees.


Tertiary costs

Tertiary costs are those that interfere in the reflections of the image and the business of the company, the drop in the quality of products or services provided by inexperienced employees or in the process of adaptation.

So we conclude that today, to face a healthy turnover, organizations need to rethink their personnel policies, work plans and salary to make them more attractive and challenging, redefine the leadership style, to make it more democratic and participatory, as well as motivating strategies, from those related to material factors (physical space, quantity and volume of work, hygiene and safety at work) and the social organization of work, rewards, promotions, among others.


How to calculate turnover cost

To calculate turnover, the variables you must consider are: number of hires, number of layoffs, and total number of employees in the company. With these values, you will add the number of inputs and outputs, divide it by 2, and the result should be divided by the total number of employees.

The best known formula is:

Main causes of staff turnover

After knowing these calculations, the Human Resources management must focus its forces on discovering the main factors that lead to the dismissal of the employee, either at the initiative of the company or by decision of the employee. From there, he can act preventively.

Unattainable goals

When the company sets goals that employees are rarely able to achieve, the relationship with the company becomes frustrating and exhausting. Although he dedicates all his time to the activity, reaching exhaustion, he cannot comply with what is established. This feeling of helplessness in the face of this issue can lead to anxiety problems and behavior changes and affect the company's climate.

Dissatisfaction with leadership

The industry leader is the benchmark for a team's talents. If this management is doubtful or partial, employees begin, even if unconsciously, to sabotage projects, causing a productivity deficit. If industry leadership is not well trained and committed to corporate culture, you will not be able to hire the right people and the turnover will continue.

Employees with different treatments

When they want to work in a company and are hired, most professionals draw up a career plan, but they are disappointed when all the effort and motivation that went into your professional growth is blocked because another employee has earned the preference. If HR You don't have a performance review schedule or don't stick to it, you may lose your best talent, as managers will not always be fair in their choices.

In this sense, this attitude can generate collective dissatisfaction, and professionals will begin to seek recognition in other organizations.

Below-market wages

The Human Resources sector needs to annually review and update its work plan and salary, carry out market studies and always seek compatibility with companies in the same field. Most professionals know the value of the salary practiced by competitors and when the company for which they work does not value this update, they will feel the need to seek this recognition in another part.

Bad organizational culture

At present, the appreciation of the organizational culture is increasing, as well as the hiring of related professionals, transforming the business environment into a motivating and productive place.

When the opposite happens, that is, the company discloses something, but on a day-to-day basis it is totally different, professionals feel frustrated and ignored.

This feeling affects your health and contributes to the appearance of various physical and psychological problems. Therefore, even if an employee needs the job, he will not hesitate to change companies.

How to reduce turnover in a company?

Looking at the problems above, we saw that turnover almost always has a specific reason.

Corresponds to the HR area. analyze each case and measure these percentages so that prevention measures can be carried out. Let's get to know some ways to reduce a company's staff turnover:

  1. Improve the selection process.
  2. Discard professionals who are outside your profile.
  3. Train leaders.
  4. Create a culture of feedback
  5. Offer differentiated benefits.
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