Employee Turnover and Its Impact on Business

Oct 3, 2025 4 min reading

People leaving a company hurts. Not just because we lose a colleague we’ve grown accustomed to, but mainly because it has a significant impact on the business. Employee turnover is like a hole in a ship – if we don’t take care of it, we’ll just keep taking on water and won’t get anywhere.

What Turnover Does to a Company

When an experienced person leaves, they take with them know-how, contacts, and often a piece of the team atmosphere. The rest of the team suddenly has to adapt – someone takes over their work, while another becomes demotivated because “it’s just another colleague leaving.” This can slow down performance and add stress.

Moreover, people notice when colleagues around them are frequently packing their boxes. They start to wonder if there are better opportunities for them elsewhere. And customers? They also notice that their contact person is changing more often than they’d like.

Turnover can be tracked and analyzed on a regular basis; it’s good to observe comparisons over at least one year. For this, it’s beneficial to record departures along with the reasons and think about what you can do differently.

What All Turnover Affects

Team Productivity and Dynamics: The departure of an experienced person means a loss of know-how and a slowdown in work until a new employee gets oriented. Someone from the team has to take over responsibilities and fully train a new person so that they can get into the team’s rhythm and perform as quickly and effectively as possible.
Work-Life Balance: When someone leaves, someone else has to do their work – the work is redistributed among the current employees, and the workload of individuals and their overtime can significantly increase.
Colleague Morale: Frequent departures in a team create uncertainty, can significantly reduce engagement, and lead to further departures.
Employer Reputation: High turnover quickly reflects on the employer brand and can affect the acquisition of new candidates.
Customer and Partner Relationships: When people who held key contacts and trust leave, it doesn’t necessarily look good. The same applies when people are frequently changing positions and the contact person changes every month.

Every Departure Costs a Lot of Money

The costs of turnover are not just about paying for a job ad on a portal. There are other things, like interviews, onboarding, training, and in the meantime, someone has to do the work for the newcomer.

The following come into play:

Direct Costs: The recruitment process, including advertising, agency fees, participation in recruitment processes, onboarding, and training new people (hourly rates of the recruiter, hiring manager, buddy).
Indirect Costs: Lost productivity, overloading existing employees, errors caused by a lack of experience, departures of newcomers during the probationary period (lost training time, starting “from scratch”).
Financial Losses: According to studies, the departure of one employee can cost 0.5-2 times their annual salary, depending on seniority (depending on who we are looking for, how long the search takes, how many people participate in the process, onboarding, and others). Losing a senior specialist can easily cost hundreds of thousands of crowns.

Why It Pays to Address Turnover

Some might say, “People come and go, that’s just how it is.” Yes, but if we accept that, we start going in circles. Companies that actively address the stability of their teams not only have more engaged employees but also more satisfied customers. A stable, engaged team = stable results and a better customer experience.

What High Turnover Can Threaten

Company Culture: When the team composition is constantly changing, it’s hard to build trust and long-term relationships.
Quality of Work: A lack of experienced people and the permanent training of newcomers reduces/slows down the level of output.
Long-Term Strategy: High turnover slows down innovation and continuity because projects are not completed by those who started them, and new people constantly need to be trained and sought.

What Can You Do About It?

Fortunately, there are many things that can be done.

It starts with recruitment – selecting people who truly fit into the company and its culture. Setting up recruitment processes effectively, and building a positive candidate experience.

Onboarding and adaptation are also important – so that the newcomer feels they have a place from the very beginning and knows what to do. Monitoring their progress throughout the entire probationary period. You can also conduct an onboarding survey to catch problems at an early stage.

Set clear goals and align expectations (company vs. employee).
Define the job position and development opportunities – monitoring the potential and talent of individuals, clear specification of the role and career path.
Have fair compensation – it should be fair and regularly reviewed.
Open communication and feedback – it seems simple, but when an employee feels heard, their loyalty grows.

And then there’s work-life balance. Flexibility, the option to work from home occasionally, or simply setting up work according to one’s own needs – these are benefits that people appreciate more today than fruit in the kitchen.

When someone is leaving, go through the reasons for their departure with them. This allows you to work on improvements and possibly prevent the same reason for departure from recurring.

Conclusion

Employee turnover is not just a normal part of corporate life, but a factor that can significantly affect the stability, results, and reputation of a company. Its impacts are visible in team performance and motivation, as well as in customer experience and financial results. Therefore, it pays not to underestimate prevention – from careful candidate selection, through quality onboarding, fair compensation, to open communication and care for the company culture. A stable and engaged team is one of the most important prerequisites for long-term success. At the end of the day, the most important things are company culture and clearly set goals that stem from the company’s strategy, the atmosphere, team relationships, and the feeling that what we do has meaning.