High staff turnover costing business £4billion

High staff turnover costing business £4billion

The cost to British businesses of bringing in new staff is at least £4.13 billion – as new staff don’t reach peak productivity for eight months, according to new research.

Oxford Economics and income protection firm Unum say that the 28 weeks it takes for a new member of staff to reach optimum productivity costs £25,182 in wages – couple with an average of £5,433 for agency and advertising fees the grand total is £30,614.

Legal workers are the most expensive to replace at an estimated cost of £39,887 and they will take longer (32 weeks) to reach peak performance.

The research found that accountancy follows close behind, with employees taking 32 weeks to adjust at a cost of £39,230. 

Linda Smith, HR Director of Unum says: “This report reveals a stark cost implication for businesses dealing with staff turnover. While the logistical cost of replacing an employee will probably come as no surprise to businesses, the financial impact of having replacement workers learn the ropes is probably a cost that businesses have not before considered.

"£30,614 is a startling amount, and I would encourage businesses to place more emphasis on retaining talent and developing good staff to reduce the cost of staff turnover. Put simply, people stay with companies that demonstrate they value – and care for – their employees. For businesses trying to do this, financial reward is not always the answer – we know that staff increasingly value long-term employee benefits such as Income Protection so they should look at their entire benefits offering to help them keep their best people.” 

Comments (1)

  • charles Hines
    charles Hines
    Wed, 26 Feb 2014 8:22pm GMT
    Why is this unusual? Working population are not robots. 8 months for executive post adjustment is normal. It would be shorter if experienced staff were able to leave their desks/workplace and assist-more interest and incentive for them (motivates), and encouraging for the new staff member. Both go back to their desk/workplace more motivated to contribute and be aware of firm's immediate requirements from them. Mutual profit producing exercise.

Most Read

Guide to Global Mobility

Guide to Global Mobility 2017

Related Insights

HR Grapevine Magazine Latest Issue

Magazine Features

Read More