how much does hr cost

Hidden Costs of Employee Turnover to HR

employee turnover costs

Employee turnover can be an expensive issue for HR. Apart from the tangible costs of recruiting, screening, onboarding, and training new employees, there are many hidden costs that remain unseen. These costs can have a significant impact on a company’s profitability and productivity. Here are the top three hidden costs that HR should be aware of:

1. Lost productivity

lost productivity

When an employee leaves, the productivity of the company is immediately affected. The new employee takes time to get up to speed on their role and responsibilities. Meanwhile, the remaining employees may need to cover the workload of the departed employee, leading to decreased morale and an increased risk of burnout. This reduction in productivity can lead to missed deadlines, a decrease in quality of work, and a potential loss of customers.

In addition, the departing employee may take valuable knowledge and skills with them. When employees leave, they take with them an understanding of company processes and procedures, the specifics of their role, and the relationships they have built with clients and co-workers. This knowledge is not easily, quickly, or cheaply replaced. HR may need to invest in retraining existing employees or hire consultants to fill gaps in knowledge.

2. Reputation damage

reputation damage

Employee turnover can also damage a company’s reputation, both internally and externally. Internally, it can lead to a perception that the company is unstable or untrustworthy. When employees continuously leave, the remaining staff may feel anxious about job security and lose faith in management.

External reputation damage can be even more dangerous. High levels of employee turnover can lead to negative reviews on employer review sites, social media, and Glassdoor. This can also make it difficult to attract new talent, which can create a vicious circle of turnover and reputation damage. A bad reputation can harm a company’s ability to negotiate with customers, suppliers, and investors, putting further pressure on the bottom line.

3. Recruitment and Training Costs

recruitment costs

The third hidden cost of employee turnover is the recruitment and training costs. These costs can often be overlooked when considering the impact of employees leaving the company. Recruiting for a replacement can be an expensive process in terms of advertising, job fairs, and recruiter’s fees. The cost also includes the time it takes to review resumes, conduct interviews, and arrange for the successful candidate to start work.

Training costs are also an issue. The new employee must be trained in company culture, policies, and procedures. This process takes time and resources, as they may need to work alongside experienced employees before they are up and running on their own. Therefore, the value of the time employees spend training new employees must be considered in uncovering the true cost of employee turnover to the HR department.

In conclusion, employee turnover is a complex issue that can have significant consequences for HR departments and their companies. HR managers should consider the hidden costs of employee turnover, including lost productivity, reputation damage, and recruitment and training costs, and proactively work towards reducing staff turnover. Retaining employees is important for the smooth operation of a company, enabling it to maintain its profitability, growth, and reputation.

How Much Does HR Cost?

Balancing HR Costs with Long-Term Business Goals

Balancing HR Costs with Long-Term Business Goals

Human resources is a crucial aspect of any business. From hiring new employees to training and managing current staff, HR plays a significant role in the success of a company. However, with the benefits of HR come the costs. Employers must ensure they balance HR costs with their long-term business goals to ensure growth and profitability.

The Cost of HR

The cost of HR varies depending on the size of the company, the service level required, and the company’s specific needs. The most common HR-related expenses are salaries and benefits for the HR staff, software and technology, employee benefits, and recruitment expenses. The cost of HR can be challenging to assess, as it is also associated with a company’s productivity and overall wellbeing.

Outsourcing HR

One way to manage costs is to outsource HR services to a specialized provider. Companies that outsource their HR functions can reduce the cost of staffing an in-house HR department, as well as the cost of technology and training. Outsourcing HR functions also guarantees that companies receive high-quality HR services designed to meet their specific needs. Although outsourcing may appear as a practical solution, some companies may prefer to keep their HR in-house to maintain control over their HR policies and operations.

The Importance of Balancing HR Costs

While reducing HR costs may seem necessary to increase profit margins, neglecting HR budgets can lead to negative consequences. Companies that cut back on HR expenses may be at risk of experiencing lower productivity, increased employee turnover rates, and poorer-quality talent. Moreover, investing in HR can result in long-term cost savings since HR functions can help companies align their workforce with long-term business goals.

Investing in HR

Investing in HR can help companies align their workforce with long-term business goals. HR functions can increase employee engagement and retention rates, improve workforce diversity, and enhance employee development and training. By prioritizing HR programs that align with company objectives, HR functions can help companies tackle challenges, achieve targets, and ultimately improve bottom line.


Human resources is an essential function of every company, and HR costs are an inevitable part of running a successful business. Although it may seem necessary to cut back on HR expenses to save money, neglecting HR can lead to negative consequences. Companies should aim to strike a balance between managing HR costs and investing in HR functions that align with long-term business goals. By doing so, companies can ensure growth, profitability, and a competitive edge over their rivals.

Latest HR Technology Innovations to Lower HR Costs

HR Technology Innovations

Human resources (HR) is an essential department in any organization. It is responsible for recruiting, training, and supporting employees, as well as maintaining their well-being. However, running an HR department can be expensive. The good news is that technology has revolutionized HR. New HR technologies are constantly emerging to help organizations save time and money. Here are some of the latest HR technology innovations to lower HR costs.

1. AI-based Recruitment Tools

AI-based Recruitment Tools

AI-based recruitment tools are becoming increasingly popular. These tools use algorithms to sift through resumes and shortlist candidates that match the job description. They can also schedule interviews and send reminders to both candidates and HR managers. Using AI-based recruitment tools can save a lot of time and money as it reduces the need to manually go through hundreds of resumes. It also ensures that the right candidates are being shortlisted.

2. Cloud-based HR Management Systems

Cloud-based HR Management Systems

Cloud-based HR management systems are another technological innovation that can help lower HR costs. These systems store all HR-related data in the cloud, which can be accessed from anywhere around the globe. This means that employees can manage their own information, reducing the need for HR managers. Additionally, these systems have automated features that can handle routine HR tasks such as generating pay stubs and tracking time off. Automating these tasks can reduce the workload of HR managers, giving them more time to focus on strategic activities.

3. Employee Self-service Portals

Employee Self-service Portals

An employee self-service portal is a platform that allows employees to access and manage their HR data themselves. This includes personal information, pay stubs, and time-off requests. Employee self-service portals can reduce the workload of HR managers as employees can update their data themselves, reducing the chances of errors. Additionally, it gives employees more control over their HR data, which can improve employee engagement and satisfaction.

4. Virtual Onboarding Platforms

Virtual Onboarding Platforms

Virtual onboarding platforms are becoming increasingly popular due to the Covid-19 pandemic. These platforms allow organizations to onboard new employees remotely. They can provide virtual tours of the office and introduce new employees to their colleagues. Additionally, virtual onboarding platforms can automate many of the administrative tasks associated with onboarding, such as filling out paperwork and setting up accounts. This can save time and money while ensuring that new employees feel welcomed.

5. Machine Learning-based Performance Management Software

Machine Learning-based Performance Management Software

Machine learning-based performance management software uses data analytics to evaluate employee performance. It can identify strengths and weaknesses and provide personalized feedback. Additionally, it can predict future performance and identify potential areas for improvement. Machine learning-based performance management software can reduce HR costs as it eliminates the need for manual performance evaluations. It also provides more accurate and holistic feedback that can improve employee development and engagement.


HR is an essential department in any organization. However, managing an HR department can be expensive and time-consuming. The good news is that HR technology innovations are constantly emerging to help organizations save time and money. From AI-based recruitment tools to machine learning-based performance management software, these technologies can help reduce the workload of HR managers while improving employee engagement and satisfaction. Investing in these technologies can also help organizations stay competitive in the long-term.

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