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How much is staff turnover really costing your business and what can you do about it?

Posted in Employer Update, Quick Guide

Published July 2025

If it feels like it’s harder (and more expensive) than ever to hold onto good people and you’re not imagining it.

According to the data from Australian Bureau of Statistics, job mobility – that is, the rate at which employees change jobs – in Australia was 8% in the year ending February 2024, equating to approximately 1.1 million people changing jobs. Industries such as transport, trades, warehousing, and logistics have experienced notable shifts, impacting business operations and costs. And it’s not just inconvenient. It’s costing businesses tens of thousands of dollars every time someone walks out the door.

So, what does turnover actually cost?

Let’s break it down.

Replacing an employee encompasses various costs and can vary depending on:

the type of employment;
the value of the employee to the business;
recruitment costs;
how long roles remain unfilled;
temporary labour costs;
induction/training costs; and
the time taken for a new employee to become proficient.

For mid-level roles, research suggests the average replacement cost sits between $23,000 and $40,000 per person. For hard-to-fill or highly skilled roles, the cost can blow out to $60,000 or more.

That’s before factoring in the hidden costs like damaged client relationships, delayed projects, overtime costs for remaining staff, and the cumulative stress on the rest of the team.

We also know:

The average time to hire in Australia is 32 days, but in transport and trades, it can stretch beyond 50 days. Some businesses tell us it can take up to 10–16 weeks to find the right replacement especially for roles that need industry experience or specific licences. Overall, employee turnover costs could vary from 30% to 180% of the employee’s annual salary.

Why are people leaving?

Here’s what we’re seeing in workplaces:

Lack of career development or training opportunities
Poor communication or leadership
Low engagement or feeling undervalued
Confusion around job expectations or processes
Inflexible rosters or work-life imbalance
Misalignment with company culture or values

Sound familiar? You’re not alone.

Small HR changes that make a big difference

You don’t need to throw money at the problem. But you do need a plan. Here are some simple, effective ways we’ve helped our clients reduce turnover:

1. Clear onboarding & job expectations

Get new hires set up for success. Clear role descriptions, structured onboarding, and early check-ins can reduce early exits.

2. Train your frontline leaders

Good supervisors = better retention. Upskilling leaders in communication, feedback, self-awareness and managing performance makes a big difference.

3. Address cultural issues

Toxic environments drive good people away. A culture check and a few tweaks to behaviour expectations, feedback processes, or team communication can shift things quickly.

4. Offer development, even in small ways

You don’t need to promise promotions. Sometimes just offering training, feedback, or a chance to be heard makes staff feel valued.

5. Make exit data work for you

If people are leaving, find out why. We run exit interviews for many clients — and use the feedback to stop the next resignation before it happens.

What could better retention save you?

Let’s say you lose 5 employees in the next 12 months.

If the average cost to replace them is $26,000 each, that’s $130,000 walking out the door. Not to mention what you lose in knowledge, expertise and relationships.

What if even one or two of those employees could be saved through better onboarding, manager training, better communication channels or updated policies – saving you $50,000+ and a whole lot of disruption.

The cost of fixing all of these things will probably set you back less than what your recruitment and disruption costs will be for losing those two employees.

The bottom line

Staff retention isn’t just an HR thing. It’s a business priority.

If you’re feeling the pain of turnover and don’t know where to start, we can help. Whether it’s a simple policy review, some supervisor training, or fixing the gaps in your onboarding – small steps can have a big impact.