Replacing members of staff in an IT business incurs costs for employers of almost £32,000 per employee, which equates to £1.89 billion for the entire sector, according to research.
There are two main factors that make up this cost.
The cost of lost output while a replacement employee gets up to speed is said to be worth over £25,000 over a 30-week period.
In addition, the logistical cost of recruiting and absorbing a new worker is said to be worth well over £6,500, including advertising costs and agency fees, interviewing prospective candidates, HR management time and hiring temporary workers before a replacement starts.
The research found that the cost of replacing staff at IT firms was much higher that at firms in other industry sectors, mainly due to longer periods taken for new staff to get up to speed.
To bring these costs down, insurance firm Unum, which commissioned the research, recommends that IT firms do more to retain existing employees.
Matt Fahy, chief innovation officer at Unum, said: “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 IT firms have not before considered."
He said: "I would encourage businesses to place more emphasis on retaining talent and developing good staff to reduce the cost of staff turnover. Put simply, people stay with companies that demonstrate they value and care for their employees."
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