Apr 05

Turnover is Costly

I have heard that there is a study by the United States Department of Labor that confirmed that costs to replace an employee could equal 200% of salary. Regardless of survey, we all know the actual and hidden costs to replace an employee. Some costs of unplanned turnover include:

  • Departing employees costs (vacation pay and other benefits);
  • Advertising for the new position;
  • Management interviewing time for the new employee;
  • Conducting background checks (driving, criminal, etc.);
  • The time it takes to train the new employee;
  • The new employee's initial low productivity;
  • Unbudgeted overtime for staff covering the empty position while it is being replaced;
  • Possible low morale of remaining staff and its related impact on productivity – staff becomes overworked and stressed during this time.

So my question for you is: How is the turnover in your physician practice? If high, what is the problem and how are you going to fix it?

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →