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How Costly Is Turnover? Evidence from Retail

Peter Kuhn^1,2; Lizi Yu³

¹ National Bureau of Economic Research · ² University of California, Santa Barbara · ³ The University of Queensland

We estimate turnover costs in small retail sales teams using daily sales data and an advance notice requirement to address endogeneity concerns. In addition to short-staffing and onboarding costs, we identify two less familiar sources of turnover costs: incumbent workers’ recruitment activities and reductions in team morale after a departure is announced. Our estimates of total turnover costs are relatively modest, however: 10% higher turnover is about as costly as a 0.6% wage increase. We attribute these low costs to a set of complementary personnel policies that ensure that only 25% of departures result in a short-staffing spell.

DOI

10.1086/710359

Volume

39 (2)

Pages

461-496

Language

en

Export

BibTeX

Sources

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