What causes the cost of employee turnover to rack up so fast? Stan Moore, Michigan State University Extension, says labor experts break up the cost into these areas:
• Cost due to the person leaving. This includes the cost of paying someone to temporarily cover the job, losses in productivity, management time to “pick up the pieces,” lost expertise from the farm, unemployment insurance premiums and claim processing time, and so forth.
• Recruitment cost (advertising, recruitment time, interview time, screenings).
• Training cost (materials and management time).
• Lost productivity cost (lower productivity as the new person learns the job, loss of other workers’ productivity as they help bring the new person up to speed, management time that could be spent in other areas of the business).
• New hire cost (paperwork and legal forms necessary to bring on a new hire, manager’s time building trust and confidence in the new employee’s work).