Another great article here.
Direct costs include:
- Separation costs — exit interviews, severance pay, higher unemployment taxes
- Temporary staffing — overtime pay for other employees to perform the former employee’s duties, or the cost of hiring someone from a temporary staffing agency
- Replacement spending — advertising, agency and search fees, drug testing and background checks, employment testing, travel and relocation costs
- Training — orientation, certifications, on-the-job training, uniforms
Indirect costs include:
- Lost productivity — the departing employee spends his or her last days performing poorly or completing exit interviews, etc.
- Reduced work quality — the new employee must learn the job
- Lost clients — a result of customer service gaps
- Reduced morale — the change’s impact on remaining employees
- Loss of institutional knowledge