Cost to Lose an Employee

While most companies have at least a general idea of the costs associated with hiring and maintaining employees, the costs of losing an employee are also factors that need to be taken into account. There are the immediate expenses like severance pay and unemployment insurance, which can be major ongoing and/or one-time expenses. Additionally, there are several other factors that may not be as obvious. Consider, for example, what happens when an employee gives notice or is informed that his or her job will be cut. The first thing that happens is that employee immediately becomes less productive, meaning your company is losing money while you’re still paying the departing employee’s salary. Furthermore, you will need to have the proper HR staff in place to handle the outgoing employee’s paperwork and exit interview, an indirect cost which should not be taken lightly. In short, employee turnaround has a very negative effect on your company’s overall productivity — just one more reason to let FRS be your domestic outsourcing partner.