When an employee leaves, you count the costs you can see: a new job posting, a recruiter, maybe an agency fee. But the vast majority of replacement costs are invisible, and that is precisely why most organisations chronically underinvest in retention.
SHRM estimates total replacement costs per employee at six to nine months of salary. Gallup's meta-analysis of 2.7 million employees worldwide puts the figure at 40% of annual salary for frontline roles, rising to 200% for management and senior positions. Those costs compound from recruitment fees, lost productivity during the vacancy period, onboarding costs, and the fact that a new employee typically needs six to eight months to reach full productivity.
In high-turnover sectors, cleaning (75–200%), hospitality (70–75%), retail (60%), these costs quickly accumulate to a significant share of total payroll. A cleaning company with 200 employees and 75% annual turnover replaces 150 people every year. At average replacement costs of €11,200 per employee (40% of €28,000), annual turnover costs reach €1.68 million.
Communication as the most powerful retention lever
Of all the factors that influence turnover, internal communication is one of the most underestimated, and one of the most controllable. Research from Axios HQ (2025) surveying 1,250 executives and employees found that 68% of organisations that increased their communication investment reported improved retention, compared to just 32% of organisations with flat or reduced investment.
Staffbase's Employee Communication Impact Study (2025) shows that 58% of employees considering leaving cite poor internal communication as a factor, 33% call it a "major factor". Employees who don't feel informed and connected look elsewhere.
Employees who rate internal communication as "excellent" have an 82% likelihood of staying. Employees who rate communication as "poor" have only a 22% likelihood of staying.
Axios HQ Annual Report 2025, n=1,250+
Gallup's Q12 meta-analysis, the largest study ever conducted on employee engagement, covering 2.7 million employees across 96,000 business units, shows that top-quartile engaged business units have 59% less turnover in high-turnover sectors, and 24% less in low-turnover sectors. Organisations focusing on engagement see an average 18% reduction in turnover.
The mechanism is direct: better communication → more engagement → lower turnover. And for employees without desk access, the 83% of frontline workers with no company email, engagement begins with reachability. If you can't reach them, you can't engage them.
Industry comparison: turnover costs by sector
| Sector | Annual turnover | Avg. annual salary | Replacement cost/employee | Source |
|---|---|---|---|---|
| Cleaning / Facility Services | 75–200% | €28,000 | €11,200 | Jobber Academy; Facility Executive |
| Events / Hospitality | 70–75% | €30,000 | €12,000 | BLS; OysterLink |
| Retail | ~60% | €30,000 | €12,000 | Mercer; BLS |
| Manufacturing | 24–32% | €38,000 | €15,200 | Corporate Navigators |
| Healthcare | 18–53% | €42,000 | €21,000 | BambooHR; DailyPay |
| Government / Municipalities | 10–15% | €46,000 | €23,000 | BLS |