The True Cost of Employee Turnover
When an employee leaves, the visible cost — job postings and recruiter fees — is only the beginning. Research by SHRM and Gallup consistently shows that replacing an employee costs 50–100% of their annual salary for hourly and entry-level roles, and up to 200–300% for managers and specialists. The majority of this cost comes from lost productivity: the vacancy period, the new hire's ramp-up time, and the manager hours spent on hiring and training.
This calculator estimates three components: (1) recruiting and agency fees you enter directly; (2) training productivity loss, which assumes the new employee operates at 80% efficiency during onboarding and a team member spends 20% of their time supporting them; and (3) vacancy gap loss, which assumes 50% productivity loss while the role is unfilled or newly onboarded. Adjust these assumptions based on your specific situation.
Frequently Asked Questions
Technology and healthcare have the highest per-employee turnover costs due to specialized skills. Retail and hospitality have high turnover rates, so cumulative costs add up even when per-employee costs are lower.
Yes. If your company pays severance, include it in the recruiting cost field. Severance can range from one week to several months of salary depending on tenure and company policy.
If one employee's turnover costs $60,000 and a retention program (salary adjustment, training, wellness) costs $10,000 per year, the ROI of preventing even one departure is clear. Use the total turnover cost as your retention investment benchmark.