Counting the Costs of Losing Talent

Send to a friend

Send this article to a friend.

Sponsored Article

The costs associated with losing talent are often pegged at around 1 ½ times the employee’s salary! The costs can be much higher for top managers, executives or sales agents, or a bit lower for front-line staff, which are easier to find and train. In the following section, I talk about how organizations lose money when they lose people.


A lot of paperwork comes with a divorce, right? When an employee leaves, the employer must spend time and money in administrative costs on doing paperwork, conducting an exit interview, tying up loose ends, and transferring the employee’s workload.


To fill the vacant position, the employer must create and advertise the job, pay fees to staffing agencies or headhunters, spend time conducting interviews (which isn’t a quick process) and negotiating terms, and sometimes pay travel or moving expenses for the new hire. The human resources department also spends time and resources sorting resumes, creating letters of offer, and arranging benefits and payroll for the new staff member.

Orientation and Training

A new employee is an investment. Introducing a new employee to the organization and then getting the person set up with a workstation, an e-mail account, a phone line, and office supplies is just the start. Employers also spend a lot of time and resources on corporate training for new hires and specific skills training, all the while enlisting support from the new hire’s coworkers and supervisor.


In addition to all the out-of-pocket costs identified in the preceding sections, the biggest financial hit by far comes from lost productivity. When the focus on the actual work shifts to simply finding someone to do it, productivity can go out the window. For the exiting employee, productivity is lost in the weeks, months, or even years prior to leaving. Not only are exiting employees unhappy, but they are often also intent on making those around them unhappy and less productive. For the new employee, getting familiar with the new tasks takes time and involves a learning curve. Plus, coworkers may need to take on additional work and spend part of their time helping to train and orient the new hire, so their own work suffers.

A growing body of research reports that engaged organizations grow profits as much as three to four times faster than their competitors. Research also reports that highly engaged organizations have the potential to reduce their staff turnover by 80 to 90 percent.


Building a solid reputation is not an easy feat for any organization. Doing so takes years of hard work and a proven track record of delivering consistently on promises.

But when an employee leaves, relationships with customers or clients can suffer. Perhaps the employee built a trusting relationship with a customer, and that relationship is dissolved when the person leaves. Or perhaps a client hears about the rate of turnover at the organization and starts to think of taking its business elsewhere.

Get your FREE copy of the go-to resource on the topic, “Employee Engagement for Dummies”, or learn more about our JumpStart Action Planning Workshop by contacting Sean Fitzpatrick at or 613-248-3417, ext. 501.

About the Author:

As President and founder of TalentMap, Sean Fitzpatrick has helped many leading public and private sector organizations maximize engagement and boost productivity through TalentMap’s integrated employee feedback system.

TalentMap offers ‘off the shelf’ and ‘custom-designed’ employee engagement solutions that foster continual improvement within your organization.

For information on placing a sponsored article on, please contact Terry Tyo at 613-238-1818, ext. 248.

  • 1
  • 2
  • 3
  • 4
  • 5

Thanks for voting!

Top of page