These one-time expenses for recruiting and hiring can range from 10 to 20 percent of the new employee's first year's compensation. The total annual cost of turnover and absenteeism can be substantial. The result of this calculation may motivate you to take immediate steps to find the causes and formulate solutions for decreasing your company's turnover and absenteeism rates. There are many reasons that employees change jobs or don't show up for work. Some can be controlled by the company and some cannot.
Turnover is often the result of perceived organizational and operational weaknesses.
Sometimes the perception is based on fact, sometimes it is not. Regardless, the effect on your bottom line is very real. To help find the root cause of absenteeism and turnover, simply ask your workers in an exit interview. A tabulation of responses of exit interviews will help management determine those areas that need improvement. However, don't wait for your employees to quit.