Potential Savings For Reducing Employee Turnover

The following table shows the potential savings per year for select companies if they were to reduce their employee turnover by just 1%. These figures are based on public data from Fortune Magazine's 100 Best Companies to work for January 2001. The estimated turnover cost used below is based on 20% of the most common entry level salary of each company. This is a very conservative estimate. In reality, these costs can be much higher. HR professionals estimate this cost between 50% and 125% of an employee's salary. The recruiting commission alone can range between 20-30% of salary. Realized savings would thus tend to be significantly higher than illustrated below.

Note that for just a one percent decrease in turnover, every company could realize a one year savings between 200 thousand and 2 million dollars.