Four in ten employees employees voluntarily or involuntarily leave their job every year.  If you look at just private industry, this number is closer to 4 1/2 in ten.

The South has the highest level of total separations, followed by the West, Midwest, and Northeast. 

In terms of industry, total separations are highest in Leisure & Hospitality (76%), followed by Construction (62%), Professional & Business Services (54%), Trade, Transportation, & Utilities (46%), Other Services (38%), Natural Resources & Mining (32%), Manufacturing (32%), Information (31%), Healthcare (30%), Financial Activities (28%), Education (24%), Federal Government (21%), and State & Local Government (16%). 

During the second quarter of 2007, the average “total separations” in Healthcare were 389,000 workers per month.  This equates to 4.7 million separated workers per year, 90k per week, 13k per day, 500+ per hour, 9 per minute, or one every seven seconds.  Two thirds of these separations are “quits”, not layoffs or terminations.

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One employee every second of every minute of every hour of every day of every week of every month of every year… 2% per month, 24% per year….  That is how often an employee voluntarily leaves their job in the U.S. Workforce.  One employee every second of every minute of every hour of every day of every week of every month of every year… OK, let’s look at this another way.  How much of a resource drag is this constant turnover? 

The analysis is pretty convincing, the average employee costs 50-150% of their salary to replace.  Certainly there are examples that can be given on both sides of the range, however those in the know generally accept these numbers.  But let’s not be silly, just ’cause human resources believes them doesn’t mean anyone else will. So, lets start with 25% as the replacement cost of workers.  Nobody should argue with that.

According the the July 2007 Bureau of Labor Statistics report, the average worker earned $17.45/hour, or $36,400 per year.  So, based on these figures, the average replacement cost of the typical U.S. worker is $9,100. 

35 million “voluntary quits”/year X $9,100 replacement cost per worker = $318,500,000,000 per year in replacement costs of voluntary turnover.  That’s Billions.  With a B.  A Big B.

That’s a chunk of change.  Way more than the last Powerball winner received ($318,000,000). 

$318,500,000,000 per year in replacement costs of voluntary turnover.  $10,000 per second.  Yea, that’s right. Do the math, I’ll wait.  Take the 318 billion and divide it by 365 (days), 24 (hours), 60 (minutes) and 60 (seconds).  I rounded down.  I threw in a leap year. Closer to $10,100 per second but I didn’t want to quibble.  I’m nice that way.

And remember, we are only talking about voluntary turnover.  Involuntary turnover adds another 40% to that number.  But once we’re at 10 thousand dollars a second, why argue over four or five more.   And we are being purposefuly conservative in the cost of turnover we are using in our calculation.  All of this said, a more honest assessment of the true cost of all employee separations is closer to $20,000 per second.  WHEE!!!

So, is employee turnover just a tactical issue that employers can deal with when they can afford to?  I guess if companies want to watch $9,000 walk out the door when an employee leaves, or throw away the same amount of money when the company makes a bad hiring decision, employee retention doesn’t deserve a place on the front burner.  I was being sarcastic.  I know, hard to believe.  But I was.

The best time to plan for turnover is before you have to.   Here’s a better one.  The best time to plant a tree is 20 years ago.  The second best time is today.

I know.  That’s why I write books!