"I'm out." The final signal.
Turnover is expensive. Recruitment, integration, time to full productivity, lost output during the vacancy.
All of that is documented. Everyone knows it.
The cost of turnover depends on who leaves. A high performer costs 200% of their salary to replace. A middle performer, 100%. A low performer, 40%.
When your management practices are dysfunctional, it's your high performers who leave first.
For 7 departures per year (15% turnover on 50 people) at an average employer cost of €85K:
| Scenario | Profile of departures | Annual cost |
|---|---|---|
| Worst case | 3 HP, 2 MP, 2 LP | ~€1.2M |
| Average case | 2 HP, 3 MP, 2 LP | ~€600K |
| Best case | 0 HP, 2 MP, 5 LP | ~€240K |
The gap between worst and best case:
€960K per year
That's the cost of losing your talent instead of losing your deadweight.
Note: HP = High Performer (×2.0), MP = Middle Performer (×1.0), LP = Low Performer (×0.4)
Gallup (2008): at least 75% of voluntary departures are linked to factors managers can influence.
Not salary. Not the job market. Management.