5 reasons why employee turnover is simply bad

There are 5 reasons why employee turnover is simply bad for a company today, and they are: loss of expertise, hiring and training costs, disruption of work and productivity on the project, a negative impact on the morale of the remaining team members, and the risk of reputational damage.

Below we explain the reasons and give examples from practice.

Reason 1: loss of expertise

Every departure takes experience and specific knowledge with it. This reduces productivity and the quality of the work until the new hire settles in (if they can ever reach the same level).

Example from practice: Pero, an employee, worked in a construction company for 6 years doing cost estimates. He is replaced by a less experienced person with no industry experience.

Reason 2: hiring and training costs

Today everyone is looking for good workers, and the market is saturated with offers. Attracting, selecting and onboarding new hires takes time - and money.

Example from practice: The recruitment department posted 3 job ads on the largest portals and did not receive quality candidates. Only by hiring an external agency did it manage to get candidates, but at a high cost.

Reason 3: disruption of work and productivity on the project

The departure of a project team member often causes delays. Besides delays, errors in the work and additional corrections are possible.

Example from practice: After the foreman leaves, Natali, a technician, steps in and checks the quality of the crews' work. Because of the inspections outside the office, she falls behind with the billing of completed works.

Reason 4: a negative impact on the morale of the remaining team members

The departure of an experienced employee does not have a positive effect on the satisfaction of those who stay on the project.

Example from practice: After Marko, the foreman, left, the atmosphere deteriorated because deadlines are tight and there is plenty of work.

Reason 5: risk of reputational damage

A continuous decline in quality also leads to a loss of the Client's trust. The Client does not continue the cooperation, which has a negative impact on the company's revenue.

Example from practice: Because of unfulfilled obligations and delays, the Client found another Contractor for phase 2 of the works.

Employee turnover costs you more than you think.