It costs approximately $50,000 to replace a $50,000 a year worker. The more the employee earns, the greater the expense of replacement. Replacing an executive can cost two to three times their annual salary. A turnover cost of only 15% for rank and file employees remains a substantial figure.

According to an extensive survey by the Gallup Organization, employees leave their jobs for three basic reasons:

1. Mis-hiring. Most of these folks leave in the first six months. Companies that don’t follow an effective hiring process wind up with misfits. In many cases, poor orientation compounds the problem, leaving employees to ask themselves “Why am I here?”
   
   
2. Lack of growth opportunities. Most valuable employees want to be able to grow in their careers. Employees who don’t have a clear understanding of their career path will also leave.
   
   
3. Poor relationships with their boss. Nobody wants to work for a jerk. Bosses who are too controlling or too distant will foster high turnover. This is yet another reason why management training remains so valuable.
   
   

Contrary to popular wisdom, money has little to do with turnover. Most surveys have found that satisfied employees won’t leave a job unless they’re offered a raise of at least 15% or more. Once workers receive a fair day’s wage, salary quickly drops to between fifth and seventh place on their list of concerns, below such factors as job satisfaction, benefits, stress levels, and acknowledgment. The only exception is the low wage earner who needs to earn a living wage.

As a rule, the older and more experienced the worker, the lower the turnover rate. Although this statistic has an inherent bias, employers who use low wage employees should consider hiring senior workers to reduce their turnover costs. For more information on job retention and turnover, visit the federal Bureau of Labor Statistics site (www.bls.gov).