Don’t quit now

A recent study by the Work Institute estimates that US companies spend USD 900 billion per year to replace employees that left their respective firms. That figure has almost doubled over the past 10 years. From recruiters to background checks, new employee training, as well as opportunity time costs and loss of productivity, there are plenty of cost elements that staff turnover creates. Combined with currently tight labour markets, we think trends such as digital nomads, upskilling, remote first attitudes, or the Great Resignation phenomenon are not transitory, but here to stay. A rise in wage inflation will also add to the financial impact for business. The Work Institute survey suggests that career paths, health and family, and work-life balance are the main drivers of voluntary turnover. Historically, pay was significantly more important but lately declined. It is also notable that total rewards (including non-monetary) became much more relevant in the past two years. Failure to attract or retain talent is a material risk for sustainable business models.

Source: US Bureau of Labor Statistics, July 2024