According to companies such as Mercer and Ramstad, Canadian companies face substantial costs associated with employee turnover in 2024, with the average cost per employee reaching between $31,000 and $54,000 annually. Some businesses report costs exceeding $100,000 per employee, highlighting the significant financial impact of employee departures.
Canadian Companies Turnover Facts
The average company turnover in 2025 was between 12% to 15%. What are the main factors contributing to turnover:
- Better pay and benefits elsewhere: The significant driver, explaining near 40% as the primary reason for increased turnover.
- Employees resigning: 30%, of which the root cause is directly involving employee financial issues or workplace relationships issues.
- Retirements: 18% of respondents cited this as a factor.
- Competitive job market: Also mentioned by 12% of respondents.
And with the current and future economic environment, this situation will just get worst. Between 18%-26% of employees are financially stressed, living from paycheck-to-pay cheque, and they spend in average 9 hours per week dealing with their finances on their work time. They are looking to leave your company immediately for a promise of a higher pay.
What does this mean to a typical enterprise of 100 employees?
Based on the above results, 13 employees have left the company, of which 9 employees due to financial reasons. This is costly for any companies, and should be resigned as at ‘cost of doing business’.
How damaging is your employee turnover?
Direct Costs:
- Recruitment:
- The costs associated with advertising job openings, interviewing candidates, conducting background checks, and paying a commission (or fee) if you have used a head-hunter.
- Hiring and Onboarding:
- Expenses related to paperwork, increased salary (to attract new talent), benefits, and training for new hires.
- Training:
- The cost of providing new employee training and ongoing development.
- Lost Productivity:
- The time it takes for a new hire to reach the same level of productivity as the departed employee, which in average takes up to 9 months for the new employee to deliver as per expectations
Indirect Costs:
- Lost Business:
- Disruptions caused by turnover can lead to a decline in customer satisfaction and business.
- Reduced Morale:
- Employee turnover can negatively impact team morale, creating a sense of uncertainty and potential dissatisfaction.
- Loss of Knowledge and Expertise:
- When experienced employees leave, their specialized knowledge and skills are lost to the company.
- Decreased Productivity:
- As employees adjust to new roles and workloads, productivity can suffer.
- Increased Stress on Remaining Employees:
- The workload of remaining employees can increase, leading to burnout and a desire to leave.
The sum of the direct and indirect cost is between $31,000 and $55,000 per lost employee, depending on the typical employee salary that have left the company. In our example, for employees that leaves for financial reasons, the impact to the company P&L would be a whopping $387,000 annually !
Kaira will help you convert your Turnover Loss into profits!
The Employee Financial Stress driving the vast majority of employees turnovers can be turned from a risk to a lead opportunity with Kaira AI solutions. Your first one big step has already been taken, recognizing and sizing the issue.
From there, by partnering with Kaira, you will obtain i) monthly statuses on your aggregated employees financial wellbeing status and recommendations to improve results on a proactive basis; ii) your respective employees will have access to the Kaira mobile app, permitting each employee to securely and confidentially manage their personal finances. The coaching chatbot interacts with the employee to obtain and understand financial literacy, establish his own retirement plan, and finally have the opportunity to execute his plan with Kaira financial strategic partners with a timely follow up on its financial plan performance on the Kaira mobile app.
Results:
- Your employees are less stress and in control of their finances
- Improves the employer culture through recognition of the company investing in employees
- Attracts best top talents through effective program offer
- Increase loyalty toward the company
- Improve employee engagement
- Reduced absenteeism
- Improved productivity
- Sustainable turnover decrease
Partnering with Kaira: your best Return on Investment
Kaira’s AI platform and mobile app is an easy plug-and-play platform, which makes it easy to use for employees and manage for HR department. Following our example above, at an annual contract cost of about $11,000, your investment represents a potential 8:1 return on investment!
Can you afford missing out on this opportunity? We believe you know already the answer.