The real cost of losing staff due to poor communication

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What is the real cost of losing staff due to poor communication? 

So we have spoken many times about the cost of poor communication.  It has been shown in research to cost up to 32% of profit.  For a business making $500K pa, this is $160K, that’s not small change.

So you have a business and there are issues, perhaps management is not perceived as approachable, perhaps there is relational tension as different staff clash with each other, perhaps staff don’t feel valued or understood.

Gallup found that 95% of staff leave jobs due to problems with either their boss or co workers.  This is that relational stuff they feel just can’t be solved.

The sad thing is that many times they either haven’t tired, because they believe it wont change anything, or they don’t have the skills to have these hard conversations.  We have all been there, it just feels too hard and we believe that the grass is greener on the other side.

Now it may be, but what happens when you come up against the same issues in a new workplace?  Isn’t it better to have the skills to deal with it when it happens again? It is not that difficult, I promise.

One of the many costs is the costs of new hire.  Let’s look at this a little closer.  Perhaps you have the staff member who had all of that procedural knowledge that is not necessarily written down, all of that experience that cannot be quantified.  What happens if they leave?  All of that knowledge will be lost.  What price can you place on that?

Research estimates that on paper, the costs of losing a staff member can be between 16 and 20% of the salary of the person being replaced for low to medium positions.  For senior executive roles it can be as high as 213% (Zane Benefits, Small Business and HR)


Deloitte, found in some recent research that the true cost is much more when you consider;


  • The cost of hiring a new employee including the advertising, interviewing, screening, and hiring.  Not only this but the time it takes to find the right person.
  • Cost of on-boarding a new person including training and management time.
  • Lost productivity… it may take a new employee as much as 1-2 years to reach the productivity of an existing person.
  • Lost engagement… other employees who see high turnover tend to disengage and lose productivity.  As well as the rick you take when hiring, will the new person fit in.  Is the culture you have healthy?  It may not be.
  • Customer service and errors, for example new employees take longer and are often less able to solve problems.
  • If the new team member is entering a toxic workplace then stress levels will surely add to mistakes and communication issues
  • Training cost. For example, over 2-3 years a business likely invests 10-20% of an employee’s salary or more in training.  You don’t want to be in that position of just training them and then they leave…..
  • Cultural impact… Whenever someone leaves others take time to ask “why?”

The real cost of losing staff is hard to measure as many workplaces don’t have measures in place to capture this.  From my perspective the most important thing is to understand why the staff member left and to address any communication, staff or systemic issues that contributed to them leaving.

Until next time Care, Connect and be a Courageous Communicator.

Let’s grow your business one conversation at a time. 

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