Question

Human resource directors estimate the cost of employee turnover at _______________ for an hourly paid employee.

a) 20% of annual salary
b) 50% of annual salary
c) 75% of annual salary
d) 100% of annual salary

Answer 1

The cost of employee turnover for an hourly paid employee is estimated to be up to 50% of the annual salary, which includes various factors such as recruitment, training, and lost productivity.

Step-by-step explanation:

Human resource directors estimate the cost of employee turnover at various rates for different positions. For an hourly paid employee, estimates for the cost of turnover typically range but it is commonly cited that it can be up to 50% of the annual salary. This estimate takes into account several factors, including the costs of recruiting and training a new employee, lost productivity, and the potential negative impact on team morale and customer service.

For example, if an hourly paid employee earns $30,000 annually, the turnover cost for this employee could be as much as $15,000. Evaluating the true cost of turnover is essential for businesses to understand the financial impact and work towards reducing turnover rates by improving retention strategies.