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Retention Management And Metrics

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.

Company¹Number of Employees (US)Turnover RateEstimated Turnover Cost per employee²Reducing Turnover 1% Savings / year
Charles Schwab18,86312%$8329$1,512,000            
MBNA America Bank16,96015%$4800$1,000,000            
Average US Company10,00015.6%$5000$500,000            
How much can you save? Calculate Your Savings Now
1. Based on Public Data from Fortune Magazine's 100 Best Companies to work for January 2001.
2. Estimated Turnover Costs calculated at 20% of most common entry level salary as provided in note 1.

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