Each Nurse Exit Costs $56,300, and Their Retention is Important for All of Us

Each nurse exit costs $56,300 says one national research group[i]. This figure is important to everyone who is reading this article for two very different reasons:

1. As baby boomers reach their peak healthcare ages, nurses have become the largest healthcare job and too many of them are closer to retirement, too. The average nurse is 46 years old, and more than a quarter of them plan to retire or leave nursing in the next five years.[ii] So our overall healthcare costs along with the cost of nurse turnover can only go higher.
2. Healthcare organizations are therefore quite fixed on their efforts to retain nurses, given the cost of losing just one. Would your organization be just as fixed if your executives knew and believed in the dollar cost of losing just one of your most important employees?

Employee retention solutions become sharper, become more tactical when our top teams know and believe in the actual direct dollars costs of losing an important employee. In fact, our company’s first act to reduce turnover is to invite finance to join with HR to place a dollar cost on turnover. We apply a proprietary algorithm to do so, and we are able to capture both the hard-dollar recruiting, hiring, and training costs, as well as the often-underrated lost productivity losses while the job is open and while the new-hire ramps up.

Calculating the Cost of Turnover in the Real World can be Jarring

My favorite of all turnover-calculating experiences was with a defense contractor company that built rockets. We invited the CFO to participate in the cost calculation, and he reluctantly agreed. After digging through the specific data together, we concluded as a team that losing one aerospace engineer cost the company $121,500. After receiving this startling data, the CFO just nodded slightly, making me wonder if he was fully bought-in or not on the cost of turnover as an issue.

The next morning that same CFO called me, said he couldn’t sleep, had gone to his office early, and after extrapolating some numbers had concluded that turnover was his defense contractor company’s second highest annual expense. His high-energy voice told me we had his attention and a convert!

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Further Reading: Employee Retention Secret: Make Your CFO Your Best Friend

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So How Much Does Turnover Cost Per Job?

Here are some other cost examples we’ve helped determine:

• Chicken processor: $5,800
• On-floor manufacturer: $10,000
• Truck driver: $17,848
• Call center representative: $29,447
• Software engineer: $131,000
• Physician: $225,808

Your cost for these jobs might be different, as these calculations took into consideration the number of days these jobs stayed open and other factors unique to each client, but overall, you can start seeing the big picture for how many dollars literally go out the door with every exit.

Costing Turnover Highlights Dollars, Eliminates the Need for Percentage Benchmarks

Here are two real-life scenarios when discussing turnover progress with a CEO:

Scenario A: HR tells that annual turnover compared to external benchmarks is good, that for example your company’s turnover is 18% compared to similar companies’ turnover which is 20%…causing the CEO to say “Good job!”

Scenario B: HR tells the same, earning back another “Good job!”, but then adds that turnover’s annual cost is $6.2 million. The CEO immediately understands that external benchmarks might generate a feel-good exercise which disguises the real issue.

Improving retention is not about beating the competition but is instead about retaining the people you need to keep. The only comparative data that matters is how you are doing now versus in the recent past, as we all must continue to improve.

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Further Reading: Escape the Benchmark Data Trap and Calculate Turnover’s Real Cost

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Two Ideas to Help You Reduce Turnover in Your Company

You can start right now by utilizing our free proprietary turnover calculator to get your actual dollar figure on the cost of losing one employee from a particular job…or for many jobs. There is no limit on using it and once you go through the calculator process, I’m glad to discuss ideas with you on ways to improve your calculations and next steps to get that data in front of your CFO.

Secondly, I have a special offer for healthcare companies today. If your nurse turnover is crippling and your dollars are stretched too thin, we have an innovative new offer to help you, with no out-of-pocket expenses you can start TODAY: Retain Nurses, Reclaim Dollars in 2025

Yes, we can apply our solution to your healthcare company that historically reduces nurse turnover by 40% and more for virtually no cost. Read more and then let’s schedule a call and I’ll tell you more. Call or text me at 407-694-3390, write me at DFinnegan@C-SuiteAnalytics.com, or connect with me on LinkedIn.

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[i] 2024 NSI National Healthcare Retention and RN Staffing Report, https://www.nsinursingsolutions.com/documents/library/nsi_national_health_care_retention_report.pdf

[ii] https://www.aacnnursing.org/news-data/fact-sheets/nursing-workforce-fact-sheet