Turnover may be part of the cost of doing business, but it may be higher than some leaders think. The average cost of replacing a single Canadian employee has climbed to just over $30,000, according to a new report.
The survey also reveals that nearly one in three hiring managers say they expect turnover to increase this year, even as they report that replacing staff is getting more expensive — this year’s figure of $30,680 is nearly $1,500 higher than was reported in a similar survey last year.
The previous year’s survey also found that nearly one in five hiring managers faced turnover costs of at least $100,000 — including one-third of all companies with at least 500 employees, finds Express Employment International.
The cost to organizations comes not only from the recruitment bill but the way turnover corrodes performance, culture and employer brand, says Managing Director of Express Employment Canada Hanif Hemani. As a result, he believes that leaders need to stop treating turnover as a simple headcount swap.
“The more turnover we have, the more tumultuous our productivity can become,” he says. “It takes a while to establish a high-functioning team, and when we have high turnover, there are barriers to inputs that disrupt the efficient flow of things.”
Shorter tenures
One reason turnover cost keeps growing is structural, as today’s workforce is more fragmented and less loyal than the one many leaders grew up managing, according to Hemani.
“For the first time in history, we have five generations in the workforce, and they each have some very different needs and some very different values,” he says. “They each appreciate very different aspects of their work-life balances — typically, in the past, we’ve only had to cater to one or two generations and we were able to maintain a relatively stable workforce.”
As an example, Hemani says the average tenure for employees in Saskatchewan, where he lives, was about nine years, according to labour statistics. Now, it’s between three and four years. “You can call it loyalty, you can call it engagement, you can call it turnover, but it has gone down over the years, and there’s a cost attached to it, both quantitatively and qualitatively, and there are production and efficiency measures attached to it.”
Statistics Canada’s latest figures show that average job tenure in 2025 for Canadians employed full-time decreased by five months since 2021.
Hemani believes HR leaders should equip themselves with a sharper story when facing boards and CFOs over retention and culture initiatives. He also says that, at a basic level, turnover costs organizations not just dollars but other indirect costs that can ultimately affect the bottom line.
“That’s the fundamental tenet of why we should look beyond the actual recruitment costs and some of the other training costs that go into it — there’s an efficiency and a productivity issue,” he says. “There are some reports of one to one-and-a-half times an employee’s salary as the cost of losing that employee, and these are tangible costs for recruitment and salaries.”
Quantifying what churn really costs
But the full cost of employee churn includes what Hemani calls intangible costs. “What happens to a team dynamic when we lose an individual that was valued within that team, what happens to the rest of the team in terms of culture and morale?” he says. “You take someone out of the equation and engagement goes down, and there’s lost productivity when people become disengaged.”
Efficiencies and productivity can also suffer if the role can’t be filled quickly and others have to fill in who may not know the tasks as well, says Hemani. “Productivity not only goes down in their own current roles, it may also go down in this role that has left, and as you go higher and higher, you influence more and more people, and there can be culture shifts — little changes can become big changes if there’s enough of them over time and there’s no stability in a role, a team, or an organization, why would you want to go there?”
“And so not only does it become an internal productivity issue, it now starts to creep into onboarding and recruitment,” adds Hemani.
How can HR leaders determine the real cost of employee churn? Hemani suggests beginning with a deep engagement survey, used as a diagnostic. Done properly, it shows what different segments of the workforce actually value — whether that’s flexibility, benefits, workload, or career progression — and where the pressure points sit, he says.
Onboarding: fix the first six months
While some turnover is inevitable, Hemani believes most organizations are leaving easy wins on the table, especially with new hires. “There has been some very good data to show that structured onboarding improves retention by 50, 60, 70, and even as high as 80 per cent,” he says.
Structured onboarding includes a detailed schedule for the first weeks, a peer buddy, tools and access ready on day one, and regular check-ins with the direct manager for at least three or four months, adds Hemani. “I would say that for me, a real temperature check for the health of an organization is what happens in the first six months for an employee,” he says.
Beyond onboarding, Hemani points to a deceptively simple driver of churn: people not really knowing what their job is, or what success looks like. To find out if this is a problem, he suggests asking current employees to write their job description and to outline what a typical 30, 60, and 90 days look like in their role. Then ask new hires, a few months in, to describe the job they believe they were hired to do, he says, adding that leaders should have more frequent, focused conversations that centre on one core question: how can I support you?
Recognition and culture as retention engines
Alongside clarity and support, Hemani is adamant that recognition is not a “nice to have” – it’s a retention strategy. “Obviously, having management recognition is hugely important, but a lot of studies have shown that it’s as or even more important to have peer recognition, because you work with these people every day he says.
On culture, Hemani knows it isn’t always an easy sell in the boardroom. “Culture is a long-term thing, it doesn’t happen overnight,” he says. “Culture is a summation of many events, statements, decisions, and perceptions — culture is a top-down kind of a conversation that has to start at the top and it has to go down, and it has to be lived and seen.”
The smarter move is to treat culture like any long-term investment: define the behaviours you want, measure where you are, and then track how shifts in turnover, engagement and customer metrics line up with specific culture initiatives, says Hemani.
What HR leaders need to track
For Hemani, the dashboard for Canadian HR leaders doesn’t need to be complicated, but it does need to be purposeful. He points to three anchors: overall annual turnover, six-month new-hire turnover, and a small set of engagement KPIs.
He says culture can be a tough sell to business leaders because it costs money to create it and the outcome can be uncertain.
“You have to trust the data, and the data is very clear that high-level culture equals high-level functioning and high-level productivity,” says Hemani. “I think, inherently, as executives, we recognize that culture brings something to the table and if we take away the values and the way we operate, we know we would lose — and so the same logic can be applied that if we enhance and improve, why wouldn’t we gain?”