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How employee turnover can impact company performance


There are a number of reasons why a high level of employee turnover is bad news for a company. A high turnover rate of workers generally means that the work environment isn’t suitable for the type of employee or work, or the recruitment process is failing. There are a number of costs associated with losing and replacing employees on a regular basis, including the cost of recruitment, re-training and the loss of high-performing staff, among others.

Customer service

A business with a strong focus on customer satisfaction may rely on its staff building a solid relationship with clients. If those employees leave, clients may have a higher level of dissatisfaction if the replacement doesn’t offer the same level of service. Some customers don’t like change and switching their point of contact can be disruptive. If customer satisfaction levels drop, revenues may also fall.


A good level of staff retention will usually result in high levels of experience. Employees who serve a company for many years often build up expertise which cannot be replaced overnight. The loss of this expertise may result in a loss of custom and may even affect productivity levels as new employees have to be trained to a sufficient skill level. A lack of experienced staff due to a high turnover of employees could also affect quality of products and service, affecting sales levels and the company brand or reputation.

Financial impact

The recruitment process is typically a drain on company resources. Advertising posts, interviews and the application process, checking references, and then training each new person takes both time and money. If the employees then leave, it all has to be repeated until the company finds a candidate who will stay in the post for years rather than months.

Employee engagement

Employees who have been with a company for many years will have built skills, knowledge and confidence. A skilled and experienced workforce will drive quality and quantity, while being able to offer input to the company performance. A complete accounting service will be able to help you track and view the real cost of your workforce and how a high turnover may be contributing to that cost – they can even help you reduce staff turnover. Consulting a professional will help you improve employee retention rates.

If you would like to discuss any aspect of your workforce and how it affects your company’s performance, give us a call today to arrange an informal meeting.