TURNOVER COST Meaning and
Definition
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Turnover cost refers to the expenses incurred by an organization due to employee turnover or attrition. It encompasses various direct and indirect costs associated with the departure of an employee and the subsequent recruitment and training of a replacement. These costs include both monetary and non-monetary expenditure.
Monetary costs of turnover typically include expenses related to advertising and recruitment efforts, such as job postings and candidate screening. Additionally, there may be costs associated with pre-employment activities like background checks and drug testing. Once a new employee is hired, expenses related to training and onboarding, such as orientation programs and training materials, are also included in the turnover cost.
Non-monetary costs of turnover are equally significant and include the loss of productivity during the hiring process, the time spent by management and HR personnel on recruiting and training, and the potential disruption to team morale and productivity. Furthermore, turnover can lead to knowledge and skill gaps within the organization, which may affect performance and competitiveness.
Organizations often track turnover cost to assess the financial impact of employee attrition and to evaluate the effectiveness of their recruitment and retention strategies. By quantifying these costs, businesses can identify areas for improvement and develop strategies to reduce turnover rates and associated expenditures in order to enhance organizational success and productivity.
Common Misspellings for TURNOVER COST
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- turmover cost
Etymology of TURNOVER COST
The word "turnover" originates from the Middle English word "turnen overe" which means to overturn or reverse. It comes from the combination of the verb "turnen" meaning to turn and the word "overe" meaning over or above.
The word "cost" comes from the Old French word "coste" which means rib or side. It later evolved in Middle English to refer to the outlay or expenditure of something.
So, when combined to form "turnover cost", it refers to the expenses or losses incurred due to the process of employees leaving or being replaced within an organization. The term is often used in human resources or management to quantify the financial impact of employee turnover.
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