Profit Leaks Part 4: Turnover and Engagement

In part four of this five-part series, we’re going to discuss the turnover and employee engagement profit leak.

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Profit Leaks are Killing Your Company: Turnover and
Employee Engagement


In part three, we looked at how transactional inefficiencies can wreak havoc on your HR department, slowing down strategic collaboration and growth. In part four of this five-part series, we’re going to discuss the turnover and employee engagement profit leak.

Profit Leak #4: Turnover and Employee Engagement

The True Cost of Turnover

What does employee turnover really cost you? When you factor in interviewing, hiring, training, reduced productivity, and lost opportunity costs, it can be staggering:

  • Entry-level employees: 30-50% of their annual salary
  • Mid-level employees: as much as 150% of their annual salary
  • High-level employees: upwards of 400% of their annual salary

Employee Turnover: Crunch the Numbers

When you start to add that up, the numbers are shocking and it becomes apparent that turnover is a major culprit of profit leaks. While it may seem costly to implement a unified solution to improve your company’s culture and work environment, the cost to ignore the problem is much steeper.

Engage Employees to Combat Turnover

It’s a known fact: employee engagement drives growth. When you have happy employees, you have productive employees, and productive employees produce happy customers. According to Gallup, companies with high employee engagement outperform those with low engagement the following ways:

  • 22% higher profitability
  • 40% lower employee turnover
  • 37% less absenteeism
  • 48% fewer safety incidents
  • 41% fewer quality defects
  • 10% better customer ratings
Engage Employees to Combat Turnover



In our next profit leaks article, we’ll discuss poor adoption of HR technology.

Want to learn more about how profit leaks may be affecting your business? Download your free copy of CFOs: It’s Time to Talk to HR About Finances.

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