The Hidden Cost of High Attrition in High-Growth Companies

In fast-scaling organisations, particularly those backed by private equity and venture capital, much of the focus is placed on accelerating revenue growth. Expanding sales teams, refining product-market fit, and driving operational efficiency often take centre stage. While these are crucial for success, one risk that is frequently underestimated is the impact of high attrition when HR functions do not scale alongside the rest of the business.

At Caerus Strategy, we have seen firsthand how a lack of investment in People functions during rapid expansion leads to higher turnover. Without structured career development, competitive benefits, and clear performance management, employees begin to disengage. The result is a revolving door of talent, with skilled individuals leaving just as they reach peak productivity. This constant churn creates hidden costs that can significantly erode business performance.

The financial impact of attrition is substantial. Studies from Gallup suggest that replacing an employee can cost anywhere from half to twice their annual salary when factoring in recruitment, training, and lost productivity. Beyond the direct costs, high turnover also damages team morale, disrupts projects, and places additional strain on the employees who remain. When key team members depart, institutional knowledge is lost, and business continuity suffers. For high-growth companies, this instability can make it harder to maintain the momentum they have worked so hard to build.

Investing in HR from the outset helps mitigate these risks. When companies prioritise structured performance cycles, competitive compensation strategies, and a strong internal culture, employees are more likely to stay engaged and committed. This stability supports long-term growth, ensuring that Product, Sales, and Operations teams are not constantly battling the disruptions caused by high attrition.

At Caerus Strategy, we support our clients in building the right foundations to scale successfully. By integrating HR as a key pillar of growth, companies can reduce attrition, retain top talent, and create a more resilient organisation that thrives beyond the initial acceleration phase.