Publication Details
Abstract
The article examines the economic cost of staff turnover in service enterprises and substantiates retention strategies. The cost structure of a single departure is decomposed into five components, of which the two largest - lost productivity and lost client relationships - together account for 48 per cent and are not recorded in accounting systems. The relationship between the turnover rate and its cost is shown to be close to linear within the observed range, rising from 0.9 to 2.9 monthly payrolls as turnover increases from 10 to 30 per cent. Six retention drivers are assessed, and the two strongest are found to be career development opportunities and the quality of the immediate manager, both outranking compensation level. Practical implications for retention policy are formulated.