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Do you know the cost of employee turnover?

August 4th, 2008

Recently I’ve read a number of articles about employee turnover, the effect on morale, and the impacts to productivity. While it’s difficult to quantify the true cost and the effect on productivity within a Finance department, we can look to other areas in the company for a view of what that cost really is. Once you can quantify it, the number is pretty staggering.

With one previous company I was at, I partnered with our headquarters in France to develop a new reporting structure for the Services segment of the organization. For this segment, it comprised approximately 30% of our revenues but a much more significant portion of our EBIT. Even with this level of significance, we did not previously have the ability to measure our productivity levels, margin performance by segment, or identify areas for opportunity. We were simply working with a consolidated P&L to report our monthly performance.

The new information that we were able to use, as well as understand the costs to the organization, was both staggering and exciting since it was a huge opportunity for continued improvement.

Read the entire commentary – Do you know the cost of employee turnover?

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