Turnover, overtime, absence, and litigation costs

Aimed at people professionals studying unit FREE03, this video addresses Assessment Criterion 3.1 by focusing on four specific categories of financial risk that arise directly from people practice: high employee turnover, uncontrolled overtime, workforce absence, and employment litigation. Rather than treating these as isolated HR concerns, the video draws out their interconnected nature and the way costs within each category can accumulate incrementally before organisations recognise their scale.

Turnover is examined through both its direct and indirect cost components, including recruitment expenditure, onboarding investment and the productivity gap experienced during the period before a new employee reaches full effectiveness. The video uses concrete salary figures and headcount scenarios to illustrate how annual turnover costs can reach into seven figures even at conservative estimates. Overtime is then considered as a labour cost multiplier, with premium pay rates such as time-and-a-half and double time used to demonstrate how a seemingly modest pattern of additional hours translates into a measurable percentage increase above budgeted labour spend. The relationship between normalised overtime, workforce fatigue and health and safety exposure is also covered.

Absence costs are broken down into direct and indirect components, and the video again uses specific employee numbers, average salary figures and absence rate percentages to anchor the financial argument. Wellbeing investment — including employee assistance programmes, mental health first aiders, flexible working and health screening — is examined in relation to absence and retention outcomes. On litigation, the video covers unfair dismissal, discrimination, whistleblowing and breach of contract as sources of tribunal and court exposure, noting the absence of a statutory cap on awards in discrimination and whistleblowing cases and the significance of legal defence costs alongside any compensation awarded.