The report, commissioned by income protection firm Unum and carried out by Oxford Economics, showed that a major cost implication for SMEs replacing staff is the lost output companies experience during the period of time the new worker take to adjust.
On average, SME workers spend 24 weeks to reach an ‘optimum productivity level.
Peter O’Donnell, CEO of Unum said: “This report reveals a stark cost implication for small and medium-sized businesses dealing with staff turnover.
“While the logistical cost of replacing an employee will probably come as no surprise to businesses, the financial impact of having replacement workers learn the ropes is probably a cost that businesses have not before considered.
“£26,595 is a startling amount, and I would encourage SMEs to place more emphasis on retaining talent and developing good staff to reduce the cost of staff turnover.”
Other factors that influence the cost:
- Hiring temporary workers before the replacement starts: £2,247;
- Hanagement time spent interviewing candidates: £722;
- Recruitment agency fees: £353;
- Advertising the new role: £289; and
- HR time for processing replacement: £155.
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