Why This Catches Up With Companies

The cost of leaving this gap unaddressed isn't abstract. It shows up on the P&L, whether or not anyone's tracking it there.

Turnover. Losing an employee typically costs 50% to 200% of that person's annual salary once you count recruiting, lost productivity, and ramp time. A 100-person company paying an average salary of $50,000 can already be losing more than $2 million a year to turnover, often without anyone naming it as a people-management problem. And it compounds: employees who watch a colleague leave show measurably lower engagement within 30 days, which means one departure can trigger the next.

Bad hires. A single mis-hire costs a company roughly $15,000 on average once the search, onboarding, and cleanup are factored in and companies without a deliberate hiring process make this mistake more than once.

Compliance. Non-compliance costs the average small business about $10,000 a year and the ground is shifting under everyone's feet. New worker classification rules, AI-related hiring regulations, and a growing patchwork of state privacy laws are redrawing what "reasonable care" looks like in 2026, often faster than a business without dedicated attention on this can track.

None of this announces itself in advance. It shows up as a resignation letter, a demand letter, or a slow leak of good people, long after the decision that caused it.