Business – 2.1 HRM – Workforce planning | e-Consult
2.1 HRM – Workforce planning (1 questions)
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High employee turnover can lead to several direct and indirect financial costs, including:
- Recruitment expenses: advertising, agency fees, and time spent by HR staff.
- Training and induction costs: resources required to bring new hires up to speed.
- Lost productivity: reduced output while vacancies are filled and new staff become fully competent.
- Separation costs: severance payments, exit interviews, and administrative processing.
- Impact on morale: remaining staff may experience lower motivation, leading to further inefficiencies.
These costs can erode profit margins, increase unit costs, and reduce the firm’s ability to invest in growth or price competitively.