Three costs, one single effect
The visible cost is recruiting. The hidden cost is vacancy: weeks in which the work gets shared out, delayed, or simply not done. The third is the replacement's learning curve, which in sales and technical roles can take two or three quarters to reach the previous person's productivity.
- Attraction and selection cost, including interviewers' time
- Vacancy cost: revenue not generated or degraded service
- Learning curve to full productivity
- Team effect: overload and risk of cascading departures
Not all turnover is bad
Low-performer turnover in non-critical roles is healthy. The indicator the committee should track is unwanted turnover in critical roles: that's where every departure has a price and where investing in retention pays off.
Most departures were avoidable
Available market evidence indicates that close to half of people who resign say their organization could have done something to retain them, and that the dominant causes concentrate around the direct manager, development, and role clarity rather than pay. That changes where it makes sense to invest.
Key takeaways
- Measure unwanted turnover in critical roles, not total turnover.
- Vacancy cost and the learning curve usually exceed recruiting cost.
- The manager and development matter more than pay in the decision to stay.
NS frameworks and reference sources
- Proprietary NS framework · TVC·NS — methodological notes from the Talent Management practice
- NS project base: anonymized cases by sector and geography
- Open market evidence and academic literature, recalibrated with client data
- SHRM — Human Capital Benchmarking Report (hiring cost and time)
- Gallup — State of the Global Workplace
- LinkedIn Talent Solutions — Global Talent Trends
This article develops proprietary NS Business Strategy frameworks, drawing on our project base and on public industry literature and studies cited above. Figures are reference ranges; each project is measured against the client's actual data.