EMI12 "The Costs of Employee Turnover" Article Summary

This article talks about employee turnover, and how it can become very costly to the business to replace employees. There are many direct and indirect costs when replacing workers, such as using money for advertisements, using time to interview applicants, and opportunity costs. Many factors contribute to the total costs of employee turnover, and they are pre-departure, recruitment, selection, orientation/training, and lost productivity. They also did some detailed studying, and found that the higher the job complexity, the higher the cost of turnover. The total cost for low-complexity jobs were ~$5700, and ~10,000 for high-complexity jobs. They have also found that the factor "lost productivity" was the biggest contributor to the total costs associated with turnover. In general, the cost of turnover is highest for the more complex jobs in large upscale hotels that operate in high cost of living locations. In order to succeed in the competitive hotel environment, you must understand the costs and factors of employee turnover and use that knowledge to create better policies and procedures for keeping your employees.

-Jimmy, Deepak