Many employers are so busy reacting to the challenges of employee turnover that company resources, both in dollars and hours, get focused on the hiring side of the equation at the expense of investments in employee retention.
Let's put actual numbers to this process so that we can make better investments in our workforce.
Hiring isn’t free. Here’s what it actually costs, on average, to bring one new hourly frontline worker into your operation:
Recruiting & Advertising: ~$250
HR Time & Admin: ~$500
Training & Onboarding (Time, Materials, Shadowing): ~$1,500
Productivity Ramp-Up Loss: ~$2,000–$5,000 depending on the role
Total: $4,250–$7,250 per hire
And that’s assuming you find someone qualified and reliable within a few weeks. For hard-to-fill or safety-critical roles, it’s often worse.
Turnover rates in frontline industries are high. Really high.
Retail: ~60%
Manufacturing: ~40%
Logistics/Warehousing: 50%+
Hospitality: Often 70%+
Let’s take a modest example:
A facility with 100 frontline workers and 40% annual turnover will need to replace 40 workers every year.
At $5,000 per replacement, that’s:
$200,000 per year in turnover costs
or
$16,667 per month
And that doesn’t include:
Manager time spent interviewing and rehiring
Mistakes made by inexperienced new hires
Low morale from constant new faces
Lost productivity during vacancies
If you’re bleeding $16K/month in turnover, what would it be worth to reduce that number by even 10%?
A 10% reduction in turnover saves $20,000 per year. IMPORTANT- that's not dropping turnover from 40% to 30%. It's dropping turnover from 40% to 36% (4 is 10% of 40).
That alone justifies spending $1,667/month on tools, processes, or programs that help retain your 100-person staff—before factoring in improvements to productivity or engagement.
Now let’s go further.
Boosting productivity by even 5% for a 100-person frontline team can yield massive returns:
If each worker drives $60,000/year in value, 5% productivity = $3,000 more per person = $300,000/year in gained output.
Imagine combining that with lower turnover.
And let’s not forget the hidden savings of better engagement:
Fewer accidents
Less absenteeism
Better customer satisfaction
Less burnout and manager fatigue
Here’s a rough monthly spend model based on different org sizes:
| Team Size | Turnover Cost/mo | 10% Reduction Value | Safe Monthly Tooling Budget |
|---|---|---|---|
| 50 | $8,333 | $833 | ~$500–$1,000 |
| 100 | $16,667 | $1,667 | ~$1,000–$2,000 |
| 250 | $41,667 | $4,167 | ~$2,500–$5,000 |
Even a $15–$50 per employee per month investment in better communication, smarter onboarding, improved scheduling, or digitized workflows pays for itself quickly.
If your operation depends on frontline labor, every point of turnover, every drop in productivity, and every disengaged employee comes with a cost.
Investing in the right tools isn’t a luxury. It’s financial common sense.
When you know your numbers, the case for change makes itself.