What Should a CFO Ask About People Costs?

Most finance teams can tell you the salary bill to the last dong. Very few can tell you what last year’s resignations cost. That’s not a criticism, it’s how most reporting is built. But it means a big chunk of spend goes unmanaged, because you can’t fix what you can’t see.

Here are the questions worth asking.

1. What did turnover cost us last year?

Not the hiring fees. The full cost.

That means the weeks a role sat empty, the overtime others did to cover it, the manager’s time spent interviewing and onboarding, and the months before the new person was fully productive.

Gallup puts the cost of replacing an employee at one-half to two times their annual salary (Gallup, 2019). Take your number of leavers last year, multiply by even the low end, and the total usually surprises people.

Then ask the follow-up. Where did those leavers come from? If a big share came from a handful of teams, you’ve found where the money’s going.

2. What’s absence really costing us?

Count the sick days, yes. But also ask what happens on those days. Who covers? Does work slip? Do you pay overtime or bring in temporary staff?

And ask about the other side of it. People who come in when they’re not well, or so worn out they’re only half there. That cost never shows up on an absence report.

Deloitte estimates poor mental health costs UK employers £51 billion a year, and about £24 billion of that is presenteeism, people at work but not well enough to do it properly (Deloitte UK, 2024). That’s a UK figure, but the pattern travels. Your share of it is real, even if it isn’t on a budget line.

3. Is engagement a soft number or a financial one?

Honestly, it’s financial. In 2025, low engagement cost the world economy approximately $10 trillion in lost productivity, or 9% of GDP (Gallup, State of the Global Workplace 2026).

So when someone says engagement is an HR matter, it’s worth pointing out that it shows up in output, absence and turnover. Those are your numbers.

4. Why are people actually leaving?

Most companies assume it’s pay. Sometimes it is. But a toxic culture predicts who leaves 10.4 times more strongly than pay does (MIT Sloan Management Review, 2022).

That matters for a CFO, because it changes where the money should go. If you raise pay to fix a culture problem, you spend more and the people still leave. If you fix how people are led, you often keep them without the pay rise.

So ask HR for the real reasons, not the polite ones on the exit form. And ask whether certain managers keep showing up in the pattern.

5. What are we already spending on people programmes, and what did it change?

Most organisations already spend money on training, wellbeing and engagement. The question is whether anyone measured what it did.

Ask for the before and after. Did absence drop? Did turnover in the teams that got the training go down? If nobody knows, nobody’s managing that spend. They’re just hoping.

It can be worth it. Deloitte’s estimate is that UK employers get back nearly £4.70 for every £1 they invest in supporting people’s mental health (Deloitte UK, 2024). That’s an average across employers, not a guarantee, and it only holds if the money goes at the real problem.

This isn’t about cutting those budgets. It’s about pointing them at the actual problem, instead of buying the same thing every year because it’s what you bought last year.

6. Where is pressure building right now?

This is the forward-looking one. Turnover and absence tell you what already happened. You also want to know which teams are heading that way.

Look for the early signs. Managers who only hear about problems once they’re serious. Teams where overtime keeps creeping up. Departments where people have stopped putting ideas forward. Those are tomorrow’s resignations.

How do you turn the answers into action?

We use three steps.

Identify. Put the real cost of turnover, absence and disengagement on one page, team by team, and find where pressure is building.

Develop. Spend where it’ll make a difference. Usually that’s helping specific managers lead better, and giving people the support to look after their own energy and health.

Sustain. Measure again, so you can show the board what changed and what it was worth.

That last step is what turns people spending into something a CFO can actually defend.