The Turnover Number Most Manufacturers Are Not Tracking

Author: Karl Koenigsberger, Sales Director, IRIS Factory Automation

You have a labor budget. You have a headcount number. What you probably do not have is an honest accounting of what it costs every time someone walks off that palletizer position for good. 

Not the wage. Everything. 

Most manufacturers have run that position through three or four people in the last two years and absorbed each departure as a normal cost of doing business. It is not. It is a recurring expense with no line item, spread thin enough across departments that nobody has ever added it up. 

Here is what the full number includes. 

Recruiting and onboarding carry real costs that rarely get captured together. Job posting fees, manager interview time, HR administrative load, and the first several weeks of reduced output while a new hire finds their footing. A conservative estimate for a single turnover event in a production role runs between $3,000 and $5,000 before the person has lifted a single case. 

Overtime to cover the vacancy goes straight to payroll at a premium. Track how many overtime hours were logged against that position over the last 24 months. Multiply by the overtime rate. That number belongs in this calculation. 

Workers' compensation exposure is where the cost can spike without warning. Manual palletizing is physically demanding. New and undertrained employees carry higher injury risk. A single lost-time claim can cost more than six months of wages when you factor in medical, administrative, and productivity impact. 

Training time is not free. Figure four to six weeks to basic competency and ten to twelve weeks to fully independent operation for a physical production role. During that window, a supervisor is spending real hours, and output is running below standard. 

Then there is the cost nobody puts in a spreadsheet. 

Every experienced operator carries knowledge that was never written down. The box that runs differently in the afternoon. The pattern that only works one way. The line quirk it took three months to figure out. When that person leaves, the knowledge leaves. It shows up later as unexplained downtime, inconsistent output, and a new hire who keeps asking questions nobody can answer cleanly. 

Add it up across every turnover event in the last 24 months. A facility that has turned over that position four times is looking at direct costs in the range of $40,000 to $80,000, before the process knowledge loss, before the overtime premiums on top of a vacancy that stretched longer than expected. 

Now project that number forward three years at your current turnover rate. 

That is the comparison automation should be measured against. Not the wage. The full cost of what is actually happening on that end of line, compounded over time. 

Most manufacturers who do this math for the first time find that the payback timeline on an automated system is shorter than anyone in the room expected. Not because the automation got cheaper. Because the manual alternative was always more expensive than the budget showed. 

The number has been there. It just needed someone to look. 

Ready to see your full picture? So are we. 

Start the conversation.