What Does Turnover Cost?
According to Helminger, one study of employment replacement costs suggests that it takes a nearly $58,000 investment in training and on-the-job learning to replace a customer service representative earning $18,000. Clearly, the cost to replace a lost employee is high. However, replacing pharmacy staff involves the added concern of patient safety. In this environment, a mistake can mean more than lost money or a dissatisfied customer. So the need for new staff to perform accurately and competently is heightened. There are formulas to help you calculate the cost of employee turnover. One such calculator, adapted by the University of Wisconsin-Cooperative Extension Center for Community Economic Development (www.uwex.edu/ces/cced/publicat/turn.html), includes four major cost categories: • Separation costs. The costs of exit interviews, administrative aspects of termination, severance pay, and increases in unemployment compensation. • Replacement costs. The costs of obtaining applicants, in
