Know the Figures

Employee Turnover Cost

What losing people costs a year, counted properly.

Replaces: HR consulting analyses and paid people-analytics modules

How to use it

Enter your headcount, average salary and turnover rate, then what each departure actually involves — recruiting, the empty desk, the ramp, and the time it takes from everyone around it. The result is what turnover costs the business each year.

Where the number comes from

  • Weekly salary is annual salary divided by 52, and lost output is valued at that rate.
  • Vacancy loss is the weeks the role sits empty, valued at full salary — the work is not being done.
  • Ramp loss is the weeks to full productivity multiplied by the share of output not yet being produced.
  • Disengagement loss counts the weeks before a resignation at half weight, since output falls rather than stops.
  • Manager and team time is hours multiplied by the loaded hourly cost of the people spending them.
  • Annual cost is the per-departure figure times headcount times the turnover rate.

What goes wrong

The part most calculators leave out.

  • Valuing lost output at salary is conservative. Most roles are expected to generate more than they cost, and for revenue-generating positions the real loss can be several times the figure shown.
  • Not all turnover is bad or avoidable. Losing someone who was not working out saves money, and this model prices every departure identically.
  • Averages hide the pattern that matters. Losing senior or specialised people costs far more than losing junior ones, and a single average salary flattens exactly the distinction you would act on.
  • The knowledge that leaves is not priced here at all. Relationships, undocumented context and institutional memory are real losses with no line in this model.
  • Disengagement before resignation is genuine but hard to measure. The half-weight assumption is a convention, not a finding.
  • Turnover has knock-on effects this ignores: departures prompt further departures, and stretched teams produce more of them.

The cost that never reaches a budget line

A team of 80 people on 78,000 average salary loses 18% a year — about 14 people. Recruiting each replacement costs 14,000, which is the number everyone sees. But the role sits empty for nine weeks, costing 13,500 of undone work; the new joiner takes sixteen weeks to reach full output, costing another 12,000; the leaver was disengaged for six weeks before resigning, costing 4,500; and managers and colleagues spend 40 hours at 75 an hour, another 3,000. That is roughly 47,000 per departure, or 60% of a salary. Across 14 departures the annual cost is about 677,000 — more than 10% of payroll, and only 14,000 of it ever appeared as a recruiting invoice.

Questions

What does replacing an employee typically cost?
Commonly cited figures run from half to twice annual salary depending on seniority and specialisation. The wide range is real: replacing a junior generalist is genuinely cheap next to replacing someone with years of context.
Why include the weeks before someone resigns?
Because output falls well before notice is given. It is the least visible part of the cost and, for people who leave over something fixable, often the longest.
Is all turnover worth reducing?
No. Some departures improve the team, and a business with zero turnover usually has a different problem. What matters is regretted turnover — the people you wanted to keep — and this calculator prices every departure the same way.
Does anything I type get sent anywhere?
No. The whole calculation runs in your browser. Nothing is transmitted, stored, or logged, and there is no account to create.

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