Though it probably took some corporate players off the talent market, the catastrophic drop in many companies' stock prices did at least as much to encourage turnover. That's how much the company says turnover directly costs the IT industry on an annual basis. Sibson builds three kinds of costs into its model. Direct costs include things like help-wanted advertising, interviewing, and overtime for employees who take on the departing workers' tasks. Sibson includes several problems in this group, such as lost customer relationships due to poor service from partially trained replacement employees, or valuable client lists that leave with employees.
Productivity suffers as the new hires tackle learning curves.
Indirect costs include things you can't easily quantify, but clearly have negative impacts on organizational productivity and know-how. Burchman mentions lower growth rates, loss of organizational knowledge, and reduced staff size and effectiveness. Management is hobbled, too. An example in the Sibson study makes the industry numbers all the more tangible. Paying attention to retention When turnover hits hard, a hiring manager's focus should turn to retaining the employees already onboard.