'Retention is always important because of the investment you make in people,' observes Gerald Shields, CIO of American Family Life Assurance Co., better known to TV viewers and duck fanciers as Aflac (Paul, 2006). While the extent of organizations' people investments varies greatly from one industry and employer to the next, experts agree that the costs of losing valued employees can be considerable. That is why some experts encourage companies to begin efforts to retain employees before their employment officially begins.
The U.S. Department of Labor's Bureau of Labor Statistics estimates the average cost to replace a worker in private industry at $13,996 (O'Connell & Kung, 2007). Other sources have replacement costs ranging from nearly 29% of an employee's annual wages to several times his/her yearly salary (Salary.com, 2006). While annual turnover rate estimates also vary, most put churn in the mid- to upper teens in percentage of employees: from about 14% to 19% (Baylor, 2006; 'How Bad,' 2007).