The Hidden Costs of Losing an Employee (and Why It Feels Like a Punch in the Gut)

When an employee leaves, it’s more than just an empty desk or a lonely coffee mug in the break room. The true costs are like an iceberg—most of them are lurking just below the surface, waiting to wreak havoc on your business.

Let’s start with the obvious one: loss of institutional knowledge. Sure, your employee said they’d “document everything,” but what you got is likely a cryptic spreadsheet, a sticky note that says “Check email,” and maybe a few leftover Post-it flags on their desk. The stuff they really knew—the shortcuts, the workarounds, the “we always do it this way because it keeps the system from crashing” secrets—walked out the door with them. And now you’re stuck trying to reverse-engineer their brain like it’s some kind of startup escape room.

But wait, it gets worse. You’re not just losing what they knew; you’re also losing time—your most precious resource. Suddenly, you’re back to square one, juggling their workload on top of your already overflowing to-do list. And you know what they say about multitasking: it’s just doing two (or ten) things poorly. So, congratulations, you’re now the accidental intern, trying to manage tasks that you hired them to do precisely because you didn’t have time for them.

And don’t forget the opportunity cost. While you’re stuck trying to figure out their old job, all the strategic, high-value work you should be doing—like growing your business, landing new clients, or finally clearing your email inbox—is put on ice. You’re working harder, but it feels like running on a hamster wheel: a lot of energy, zero forward momentum.

Then there’s recruitment. Oh, recruitment. It’s like dating, but more expensive and even less fun. You post the job, sort through a pile of résumés (half of which seem to be from people who clearly didn’t read the description), conduct interviews, and cross your fingers that the person you hire will not only be competent but stick around longer than a season of Netflix. Meanwhile, you’re burning time, money, and emotional energy. It’s exhausting—and that’s assuming you find someone quickly, which, spoiler alert, you probably won’t.

The cherry on top? This process often comes with a side of resentment from your remaining team. They’re stretched thin, picking up the slack, and wondering if they’re next in line for burnout. It’s a morale hit that ripples through the organization, leaving you with yet another problem to solve.

So, what’s the solution? The unglamorous but oh-so-essential art of documentation and process-building. Yes, it’s tedious, and yes, it takes time upfront, but future-you will thank you. When everyone’s roles, tasks, and secret tips are written down and accessible, the loss of an employee becomes a hiccup, not a heart attack.

And if you’re thinking, “That sounds great, but who has the time for that?”—well, that’s where outsourcing by task can save the day. But that’s another discussion for another day. For now, let’s just agree: losing an employee isn’t just inconvenient; it’s a financial, emotional, and logistical quagmire that no small business owner wants to deal with twice. Document, delegate, and breathe easier. Your sanity will thank you.

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John Risko brings over 30 years of expertise in accounting and financial strategy, guiding businesses across industries such as advanced manufacturing, communications, energy, and IT services.

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