The High Cost of Turnover in Engineering

Years ago, it was fairly common that employees would stay with the same company for many years. However, today the average employee only stays at a job for less than five years. This is according to data from the U.S. Bureau of Labor Statistics as of 2015. Some of the factors leading to the change include generational differences in values and a more competitive job market.

What is engineering staff turnover costing your company?

If you employ engineers at your company, it’s important to understand the cost of turnover and the things you need to do to reduce the turnover. While there will be some amount of turnover, if you do not take steps to control engineering turnover, this can be very costly to your company.

How can we calculate the cost of engineering turnover?

Many companies are in the dark in regards to engineering employee turnover costs. While leaders recognize that it is expensive, many do not fully comprehend the actual costs involved. For example, there are recruitment costs such as advertising fees and administrative costs to interview and screen candidates. Then there are other less-thought-of costs, such as loss of productivity and a lower team morale.

Read on to learn how to accurately calculate the high cost of engineering turnover, and take measures to reduce this at your organization.  Make a list of some of the average cost of turnover in your engineering team.

Separation Costs

When an engineer leaves, there are administrative costs such as exit interviews, management meetings, COBRA and payroll processing, overtime costs, and temporary help to cover a new vacancy.

Recruitment Costs

Replacing an engineer requires advertisement, interview, background check, drug test, sign on bonuses, replacement salary, and other new hire requirements such as onboarding, benefits and training.

Other Hidden Costs

There are also some hidden fees to replace even a single engineer. For example, there can be loss of productivity and missed deadlines. When a skilled engineer leaves the company this can also result in knowledge loss and client turnover. The team experiences a disruption in the normal flow of work.

Once you add these costs up, it can be as much as one to two year’s annual salary for an engineer. To help prevent turnover, it is suggested that you:

  • Provide a challenging and rewarding work opportunity for all engineers
  • Maintain any loss in staff with a temporary workforce
  • Keep abreast of changes in morale and engagement with your engineers

Want to learn how to keep or recruit top candidates to avoid these costs? Contact us today!


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