Investing in People: Financial Impact of Human Resource Initiatives

Chapter 4. The High Cost of Employee Separations

Employee separations (often called turnover) occur when an employee permanently leaves an organization. Consider that from January 2004 to January 2005, 18 percent of American workers voluntarily quit their jobs. That figure varies widely by industry, however, with relatively low rates in manufacturing and transportation (roughly 15 percent), and relatively high rates in leisure and hospitality, retail, and construction industries (ranging from about 25 percent to 45 percent).^[1] To appreciate what that means for an individual firm, consider that at the end of 2005, Wal-Mart employed 1,800,000 people worldwide.^[2] Its annual employee turnover rate is 44 percent—close to the retail industry average. ...