It sounds paradoxical, but it’s a harsh reality: when employees leave a company, costs rise—drastically. Why? Because every departure not only leaves a position unfilled, but also results in lost knowledge, overburdened teams, and often a chain reaction. The costs of turnover are not only felt in the short term but have a long-lasting impact on the entire organization. In this blog post, you’ll learn why turnover is one of the most expensive and simultaneously most underestimated risks for companies. We’ll show how high turnover rates affect teams, customers, and business success, which industries are particularly affected, and what hidden costs are often overlooked. You’ll also discover how companies can use Moodtalk, the smart teamwork assistant, to make emotional dynamics within teams visible, detect early warning signs of resignations, and effectively reduce turnover. Because those who invest in their team culture today will gain stability, productivity, and employee retention tomorrow.
Turnover Across Industries
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The current industry comparison on turnover reveals surprising insights into employees’ willingness to change jobs and clearly highlights where companies need to take action. With a peak rate of 15.42%, the arts, entertainment, and recreation sector leads the way. Close behind are agriculture and forestry at 14.41%, followed by retail and vehicle maintenance at 13.01%. These figures are representative of industries with high employee turnover, where structural weaknesses become especially apparent: low wages, limited development opportunities, and a lack of emotional connection to the employer.
Even in the energy supply sector, with a turnover rate of 12.75%, and in insurance services at 12.5%, the willingness to resign is above average. This shows that even in regulated industries with stable structures, there is a clear need for action when it comes to employee retention and leadership culture.
The healthcare and social services sector, where turnover in nursing has long been considered a serious issue, also shows an above-average turnover rate of 12.55%. In this case, it's not only the working conditions but also the emotional strain and staff shortages that are key factors driving the high rate of employee turnover.
On the other hand, clear contrasts emerge: the construction industry, with a turnover rate of 5.57%, and the information and communication sector at 6.87%, report significantly lower resignation intentions. Possible reasons for this may include better working conditions, predictable career paths, a stronger sense of professional identity, or an actively cultivated company culture.
Also noteworthy is the relatively stable result in nonprofit organizations at 10.51% and in the real estate and housing sector at 10.98%. Even though these fields don’t typically offer the highest salaries, other factors—such as a sense of purpose and job security—appear to play a more significant role in employee retention.
Industries such as professional, scientific, and technical services (9.23%) and other business services (8.99%) fall in the mid-range—an indication that targeted measures to reduce turnover can indeed have a positive impact.
Cost of Turnover for Companies
Especially in industries heavily affected by skilled labor shortages, high turnover can quickly become an existential threat.
An Example:
At the beginning of the year, one of Moodtalk’s co-founders spoke with the CEO of a manufacturing company with around 400 employees and an annual turnover rate of 20%.This means: every year, 80 (!) new employees must be hired just to replace those who leave.
With average replacement costs of approximately CHF 20,200 per person, the annual turnover costs amount to over CHF 1.6 million—just in the production department. And this doesn’t even fully account for losses in productivity, knowledge drain, or increased error rates.
Here’s a breakdown of the associated costs:
We’ve visualized in a table what turnover costs look like for organizations (based on different turnover rates and organizational sizes):
The Domino Effect: The Main Impacts of Turnover on Your Company
High turnover is far more than just an HR issue. It acts like a domino effect that ripples through the entire company, leaving clear traces in key areas—from team overload to measurable revenue losses. The costs of turnover are often significantly higher than assumed, as they impact not only HR but the entire value chain.
1. Overload: Rising Pressure on Teams
When skilled employees leave, existing staff must take on additional tasks. This not only increases the workload but also leads to mounting pressure and stress. We all know the situation: someone on the team resigns unexpectedly, and for the following weeks, we have to absorb their responsibilities on top of our own.
It becomes especially problematic when this additional burden isn’t quickly addressed—whether through new hires or better task distribution. The result of unfilled positions: employees feel overwhelmed, job satisfaction declines, and over time, sick leave and absenteeism increase.
The pressure on managers also rises significantly, as they must take on more operational tasks while simultaneously managing higher expectations and needs from the remaining team members.
2. Declining Team Morale: Uncertainty and Frustration Increase Due to High Turnover Rates
When a company experiences above-average turnover, it creates uncertainty and unrest. Remaining team members begin to question whether their jobs are secure in the long term or what exactly is causing others to leave—directly impacting their motivation.
They become less engaged, unsure if their colleagues—or even they themselves—will be next to go. Constant staff changes also mean teams must continually re-form. Processes become inefficient as task distribution needs frequent adjustment. This can cause project delays and declining quality—a vicious cycle that weakens the company over time.
Moodtalk continuously measures how team morale evolves. This ongoing observation offers a critical advantage: it enables companies to identify negative trends in collaboration early and systematically address the root causes of increased turnover.
3. Quality Loss: Customers Feel the Impact of Turnover
When companies experience high turnover, existing employees are often forced to take on more tasks in less time. This inevitably leads to a decline in quality—because when constantly under time pressure, people can’t apply the same care to their work. And when responsibilities frequently change, employees must continuously reorient and rebuild experience.
Whether it’s responding to customer inquiries, manufacturing products, or delivering services, time constraints lead to mistakes—and these don’t go unnoticed.
Customers, in particular, notice these changes quickly. Response times increase, familiar points of contact disappear, and the quality of products or services starts to decline. According to studies, companies with high turnover report significantly more complaints and dissatisfied customers (Winter, 2005). The problem: once trust is lost, it’s difficult to regain.
4. Profit Decline: The Indirect Costs of Turnover
All the factors mentioned above—team overload, declining quality, inefficient processes, and loss of customer trust—ultimately lead to significant drops in profit. It’s not just the cost of hiring replacements that impacts the bottom line. When employees are under time pressure and mistakes become more frequent, customer satisfaction takes a direct hit. Complaints increase, customers lose trust, and turn to competitors. This can be especially threatening in industries where strong customer relationships are critical.
Another problem: innovation declines. When employees are constantly changing, valuable knowledge is lost. Processes have to be re-established again and again instead of becoming more efficient over time. New products or services are developed more slowly because new team members constantly need onboarding. Instead of focusing on growth and progress, the company ends up investing its resources in managing its own turnover.
In the long term, this leads not only to declining revenue but also to a sharp drop in profitability. The costs of constant rehiring, training, and managing error-related issues increase, while income stagnates or even decreases. Companies with high turnover therefore struggle to remain sustainably successful. They fall behind more stable, better-organized competitors.
The Way Out of the Turnover Trap: A Future-Ready Organizational Culture
Turnover is not a law of nature. Companies have the power to take early action and retain their valuable employees for the long term. The key lies in building a future-ready organizational culture—one that goes beyond short-term measures and creates sustainable structures.
A positive team culture is essential. It fosters collaboration, appreciation, and psychological safety. Employees are more likely to stay when they feel part of a meaningful community, where their work is valued and they can contribute their strengths.
Moodtalk provides insights into exactly these emotional dynamics—as shown in the image above. The chart illustrates the development of team morale across three points in time, captured through regular Moodtalk check-ins. Early warning signs become visible when morale drops or tensions begin to arise.
Such a culture doesn’t emerge by chance. Companies must actively work to recognize overload and tension early on. This is only possible with genuine openness to employees’ needs and a structured approach to feedback. Early warning signs of resignations—such as declining morale or increased team conflict—often remain invisible. This is exactly where Moodtalk comes in: through continuous check-ins, the platform makes emotional dynamics measurable and provides clear action recommendations before turnover rates begin to rise.
Those who invest in cultural work today lay the foundation for tomorrow—turning employee retention from a goal into a lived reality.
How Can Team Culture Be Made Measurable and Manageable?
This is exactly where the Moodtalk Assistant comes in: it provides data-driven insights into team dynamics and helps companies identify problematic developments at an early stage. Through continuous analysis, the system reveals which teams are showing signs of dissatisfaction or overload—and what concrete actions are needed to counteract them.
What makes it special: the assistant doesn't just analyze traditional metrics—it also includes soft factors like team morale, communication patterns, and feedback culture. This allows companies not only to address immediate challenges but also to build a long-term environment where employees are motivated and engaged.
Rather than simply managing turnover, Moodtalk’s smart teamwork assistant enables proactive, data-driven management of organizational culture. Companies can identify which measures truly work and strategically invest in employee retention—before dissatisfaction leads to resignations.
Turnover is one of the most expensive and most underestimated risks. “I’ve never received a bill for turnover,” said a CHRO from the public sector in a conversation with Moodtalk. Many assume: if you can’t see it, it doesn’t exist. Yet the indirect effects often go far beyond visible costs like recruiting and onboarding.
What concrete actions strengthen your company’s team culture? How do you recognize collaboration challenges early?You’ll find the answers in our whitepaper—download now to discover practical strategies!
Sources
- Winter, S. (2005). Mitarbeiterzufriedenheit und Kundenzufriedenheit: Eine mehrebenenanalytische Untersuchung der Zusammenhänge auf Basis multidimensionaler Zufriedenheitsmessung (By Universität Mannheim, P. Drewek, W. Bungard, I. Jöns, H. H. Bauer, & C.Homburg). https://madoc.bib.unimannheim.de/862/1/Winter.pdf
- Hofmann, J., Piele, A., Piele, C., Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO, & Springel, S. (2018). NEW WORK BEST PRACTICES UND ZUKUNFTSMODELLE. In Fraunhofer-Institut Für Arbeitswirtschaft Und Organisation IAO.
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