Training, onboarding, salaries, and staff morale are all aspects that come into play when you hire a new employee, and the same factors apply when an employee leaves the company.
As a business owner, you might think it’s just a matter of replacing the employees who leave. However, it goes beyond simply adding another staff member.
You not only incur the cost of recruitment and training, but also the effects on your team and morale. In this article, we look at the effects of high employee turnover.
What is Employee Turnover?
Employee turnover refers to the rate at which employees leave a company. This includes staff members who resign as well as those who are let go by the company. There are two sides to it.
Voluntary turnover is when someone chooses to leave, whether for a better offer, burnout, or simply because they have had enough. Involuntary turnover means the business makes that call, through retrenchments or performance-related exits. Both types cost you money, and in the South African context, the damage runs deeper than most business owners expect.
The South African Reality
South Africa’s labour market has a problem that makes employee turnover more costly here than in many other countries: a genuine shortage of skilled workers across critical sectors.
Remchannel’s Salary and Wage Movements Survey found that nearly two-thirds of terminated staff from senior management positions had accumulated more than five years of service. When it is your most experienced people leaving, you are not just filling a vacancy. You are filling a vacancy left by someone who knew how the business actually worked.
Remchannel Managing Director René Richter reported that staff turnover increased by 16% across all sectors, with almost 69% of HR and reward professionals indicating they struggled to attract or retain talent. That is not a niche problem. It is a near-universal one.
What Employee Turnover Actually Costs
In South Africa’s skills-scarce market, replacing a specialist can cost between 30% and 200% of their annual salary. Where you land on that range depends on the seniority of the role, the scarcity of the skills, and how long the position sits vacant.
The visible costs of employee turnover are easier to count. This includes factors like job postings, recruiter fees, background checks, and onboarding sessions. If you use a placement agency, factor in between 15% and 25% of the new hire’s annual salary before they have completed a single week of work.
What is harder to price is everything else. Remchannel’s survey noted that given the critical shortage of engineering, IT, healthcare, and finance skills, recruitment, training, and development costs can substantially increase labour budgets. You hire someone, invest months getting them up to speed, and if they leave before that investment matures, you absorb the loss and start again.
The Productivity Gap
When someone leaves, the work does not leave with them. It redistributes across whoever is left, usually without a conversation about it, and almost never with additional pay. Over time, that quiet redistribution turns into resentment, and resentment becomes another resignation letter.
There is also a knowledge gap between long-term and new employees. A long-serving employee carries years of context that is not written down anywhere. They know which client needs careful handling, why a particular process works the way it does, and how the team actually functions day to day. A new hire can be trained on a job description. They cannot be trained on years of lived experience.
Remchannel’s data showed that resignation was the principal reason for labour turnover at 41.2% of the overall average, with Sales and Marketing recording the highest turnover by discipline at 28%, and FMCG, Retail, and Manufacturing the highest by industry at 16.4%. These are real teams, stretched thin, absorbing work that belongs to seats sitting empty.
Why Employees Are Actually Leaving
Exit interviews rarely produce honest answers. The real reasons, a manager who undermined confidence, a team dynamic that quietly turned toxic, and the slow erosion of recognition rarely make it into the formal record.
South Africa has an additional pressure, which is immigration. Skilled South Africans are not only resigning but also moving abroad, with international companies prepared to assist with relocation, making it difficult for local businesses to compete.
PwC noted that traditional retention incentives are no longer as effective, pointing out that employers who try to buy loyalty rather than resolve the underlying retention risk are addressing the symptom, not the cause. Someone takes the retention bonus, waits out the locked-in period, and leaves anyway. The business pays twice.
What Retention Actually Looks Like
The most effective retention strategies are not always the most expensive. Regular check-ins give people somewhere to raise concerns before those concerns become decisions. Transparent communication during uncertain periods reduces the anxiety that pushes people to look elsewhere.
Clear career pathways signal that there is a future here, not just a role. Meaningful approaches in retaining South African talent context include competitive salaries, career advancement opportunities, flexible and remote work options, and building a culture that genuinely prioritises work-life balance.
Remchannel’s research found that less than 30% of South African companies regularly track labour turnover and the costs associated with it. The majority of businesses are spending money on a problem they are not even measuring. You cannot manage what you do not track.
The Bottom Line
High employee turnover is one of the most expensive and preventable costs a South African business can carry. Factor in the effects on team morale, productivity, and the institutional knowledge that walks out with every departure, and the picture becomes difficult to ignore.
Retention is not a soft HR concern. It is a business decision with a direct line to your bottom line. In a country where skilled talent is increasingly scarce and increasingly mobile, the businesses that build environments where people genuinely want to stay are the ones that spend less time and money replacing the ones who leave.
Training, onboarding, salaries, and staff morale are all aspects that come into play when you hire a new employee, and the same factors apply when… Read More
