The cost of employee turnover

The Sunday New York Times had an interesting article about how some companies are trying to get typically quiet employees to speak up and share their ideas. The article, "The Silent May Have Something to Say," is by Kelley Holland in the "Under New Management" column. (Subscription might be required, although I think they're doing a free promotion this week.) Kelley points out that employees who feel they aren't free to speak up become disengaged from the company, and eventually leave. But the paragraph that really caught my eye was this:

Turnover is no joke: about 18 percent of all employees change jobs every year, according to a 2005 study by the Society for Human Resource Management, and companies spend about 1.5 times an employee's salary to replace them, according to Spherion, a recruiting and staffing company in Fort Lauderdale, Fla.

These numbers show why human resources — or the  Talent Department — is so important to a company's bottom line. It's a lot more cost effective to find and keep good talent than to constantly replace disengaged and disgruntled employees.