Costs of staff turnover surge to an all-time record high

The cost to employers of replacing staff surged last year to an all-time record, according to a survey published today, which provides further evidence of an overheating labour market.

The cost to employers of replacing staff surged last year to an all-time record, according to a survey published today, which provides further evidence of an overheating labour market.

The average costs associated with staff turnover leapt by more than 10 per cent to £3,546 a person, according to the Chartered Institute of Personnel and Development.

The costs, which include replacement expenses and indirect costs such as loss of customer satisfaction, were highest for professional employees at £5,206, while the lowest costs were for unskilled manual workers at £1,127.

Although the number of people moving jobs fell last year, firms found it increasingly difficult to replace them. The number of organisations reporting recruitment difficulties rose to 77 per cent in the first quarter of this year compared with 70 per cent a year earlier. Nick Page, a CIPD adviser on pay and conditions, said that as unemployment fell, certain skilled workers had become more sought after. "Employers have seen the cost of turnover rise as they battle for the best employees."

Although staff turnover fell 2 per cent to just below a fifth of all employees across the board, there were steeper falls in specific sectors. Turnover among skilled manual workers fell by more than a fifth to 12.7 per cent of their workforce. Professional staff turnover dropped by a quarter to 15 per cent and by more than a third among sales staff to 22 per cent.