Is employee churn cost you as much as your salary expense


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Wiki says that the cost of employee turnover can be 150% of your salary expense. It is one of those hidden costs one does not focus on. These include costs due to person leaving, recruitment costs (both internal and external), Training costs, Lost productivity costs, hiring costs and potential loss of sales or loss due to poor customer contact and internal teamwork.

Evoloshen, who specialises in employee churn, states the ROI on employee development therefore could be anywhere between 30 to 7000%. The number can be huge, enough for you to investigate.


In India, for example if you took the salary at Rs 1,00,000,and the replacement cost as Rs60,000, and if you lost 50 employees a year your cost would be a minimum of Rs 30,000,000.

So, preventive measures are required. You should think of adding value to your employees, over the value they can get at some other company. What do employees value? Is it just the salary, the ambience, the company, the experience they gain, how marketable they are because they work for you, training and educational opportunities, growth opportunities etc. Is your company better at this?

Do your managers think of employee value or meeting their goals. Is reduction of churn a goal? Are your managers value creators?

If you need help in measuring or creating employee value contact Customer Value Foundation

Republished with author's permission from original post.

Gautam Mahajan
Gautam Mahajan, President of Customer Value Foundation is the leading global leader in Customer Value Management. Mr Mahajan worked for a Fortune 50 company in the USA for 17 years and had hand-on experience in consulting, training of leaders, professionals, managers and CEOs from numerous MNCs and local conglomerates like Tata, Birla and Godrej groups. He is also the author of widely acclaimed books "Customer Value Investment: Formula for Sustained Business Success" and "Total Customer Value Management: Transforming Business Thinking." He is Founder Editor of the Journal of Creating Value ( and runs the global conference on Creating Value (


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