One in ten employees quit due to a poor onboarding journey, and there's a cost associated with that—but when that employee is a senior leader, the cost skyrockets.
The direct cost of replacing a high-level leader is not insignificant; in fact, it can erode the bottom line. The Center for American Progress analyzed 31 case studies across various industries and found that for highly educated executive positions, replacement costs can reach up to 213% of the individual's annual salary! To put this into perspective, replacing a CEO earning $100,000 annually could cost the organization up to $213,000. This figure encompasses direct costs and indirect costs such as:
➡️ Recruitment
➡️ Onboarding
➡️ Training
➡️ Lost productivity
➡️ Diminished morale
➡️ Erosion of institutional knowledge
It's clear that the financial impact of losing an executive is high; however, there's another side to it as well. The emotional cost on teams and the strain on other leaders is not insignificant and looks like the following:
➡️ Lost momentum on major initiatives
➡️ Team disengagement and confusion
➡️ Negative reputation in the talent market
➡️ Increased turnover among direct reports
Unfortunately, new leaders are often left to "figure it out." They're expected to deliver results before they've established relationships, understood the culture, or had time to settle in. It's a recipe for early exits.
Fitwell Solutions helps organizations
stop the revolving door. Our Executive Onboarding framework ensures new leaders are successful from day one. Contact us today for a discovery session.
