What is the cost of a poor hiring decision?
The cost of turnover is an elusive figure that can sabotage your bottom line without you ever seeing it. Calculating its dollars-and-cents impact isn’t that exact, but those who have analyzed the effects of turnover say that as much as 80% of its cost is hidden. There are a variety of estimates about the cost of turnover and its effect on various industries. Some studies indicate that labor turnover costs are between $10,000 and $20,000. A study of upper-level managers and executives estimated the average cost of turnover at 1.5 times the annual salary of the job. It also said that it took an average of 13.5 months for new employees to maximize their efficiency. Other studies indicate that within the first 6 months of employment an organization will spend between $5,000 and $50,000 on every new employee.
