Hr Manager
Hr Manager
Afolabi Ajayi
Hr/mktg Consultant
Employee Retention Specialist
+1 Other

Does your firm calculate the cost of employee turnover?
In my experience those firms that are aware of the real cost of turnover, make more of an effort to encourage staff to stay.
As a percentage of salary what would an average figure be for your firm?
Many thanks

From United Kingdom, London
The figures for cost of employee turnover do vary.
For managers and professionals you can anticipate them being in excess of a year's salary for a good employee.
In some cases 150% of salary is a realistic figure.
For manual workers 50% of salary might be a reasonable estimate.
In the UK very few companies take the trouble to calculate the real cost of turnover.

From United Kingdom, London
Dear Colleagues,
When we talk about the cost of Employee Turnover we should look beyond physical monetary implications, things to consider should include but not limited to teh folowing:
Cost of administering resignation-letters and documentations
Recruitment cost for replacement-adverts placed in periodicals
Cost of Selection and the time it would consume from staffers
Cost of getting a relief officer as a stop-gap
Cost of administering the recruitment and selection process
Cost of Induction training for new employees
Cost of employment itself-higher salary, official car etal
And at times cost of litigation depending on mode of departure of employee.
On the whole we as practitioners should try as much as possible to find ways of retaining our workforce.

From Nigeria, Lagos
Visit my free download web page and download "Free Download No. 4: Cost of Turnover Workbook" Excel workbook. The cost of replacing employees can be quite high.
From United States, Chelsea
Dear Colleagues,
It is quite an interesting experience visiting Bob Gately's website, I got the Employee Turnover Download he promised-very useful and crucial.
An interesting comarism would be calling it "Motivation Tied To Career Anchor".
I would suggest a visit by other members would go a long way to expose us to some other reasonings especsially from Consultants.

From Nigeria, Lagos
Dear Col
The company i am working for has comparatively very high turn over than faced by other companies in same industry and I have calculated the cost of turnover using 90% of salary (figure comes in billions) but our company feels as long as it can recruit new n bright people its ok, as recruitment cost is lesser than cost incurred for growth of this the right mindset...if its not how do i as a HR Execuutive change the mindset of my superiors in HR Department and others...
Can you Help.

From India, Mumbai
Hello Pranati:

>recruitment cost is lesser than cost incurred for growth of emploee.<

The cost to hire an employee is small fraction of the cost to replace an employee.

>is this the right mindset.<

No. Could be they don't know the cost of employee turnover.

>if its not how do i as a HR Execuutive change the mindset of my superiors in HR Department and others...Can you Help.<

Go to my free download web page, "", and download the free Excel workbooks on Cost of Turnover to estimate the cost of replacing employees.


A 2,500 employee financial services firm

used our Business Costs and Impacts of

Turnover workbook to calculate the cost

of replacing their customer services reps.

They were amazed that it cost $72,000 to

replace a $48,000 per year customer service rep.

They were replacing 200 per year at an

annual cost of $14,400,000.

Who said turnover was not costly?

Hiring employees who fail to become successful is a costly business practice and can be avoided. See the "10 Steps to increase employee retention and productivity" at ""

From United States, Chelsea

Let me know if this method of calculating the Annual Employee Turnover works for you...

Type - I:

To measure employee turnover accurately, Preferred approach is a rolling i.e. calculating annualized turnover rate. Track turnover monthly and annually but always compute it annualized. This annualized figure provides a consistent basis for comparison and trending.

Employee Turnover = Total no. of agents exiting the job during the period X 12

Avg. no. of agents during the period X no. of months in period

Average No. of agents = !FCl. Bal of HR strength for all the months in the period

(during the period) No. of months in the period

e.g. If the total turnover for the 3-month period of Jan-Mar is 10, and average monthly staff is 100, then the annualized turnover is 40% = (10/100) X (12/3)

Type - II:

Employee turn-over = Total number of agents leaving call center in a month X 12

No. of agents at the end of the month

Type - III:

Employee turn-over = Total number of agents leaving the call center during the period

Number of agents at the beginning of the period

Usually, the time period is one year. Also, total number of agents leaving includes voluntary, involuntary and internally transferred agents. However, there are times when you may want to back out transferred and/or terminated agents.

(No of people left in a period/Average no. of employees in a period) X 100

(No of Separations/Mid Month Employment) X 100

(No of Resignations/Current Manpower) X 100

(Total No. of people left voluntarily in a period/ Average no. of people employed in that period) X 100

Long Service Stability Rate = Total no. of employees with 1 yr. service or more X 100

Avg. no. of employees at start of that period

Fringe Turnover Rate = No. of employees joining & leaving within 1 year X 100

Average no. of employees in 1 year

We can similarly calculate the employee turnover with respect to Sex, Age Groups, Type of Employees, Employment Levels, etc.


Soumya Shankar

From India, Bangalore
When an employee walks away, the very first cost comes from the replacement. But replacing is not only about filling a vacancy. It is just the tip of the iceberg. Believe or not, employee turnover costs more than you think.
A study by ERE Media found that the cost of replacing employees varies a lot by their levels:
- Cost of replacing entry level employees: 30-50% of their annual salary
- Cost of replacing mid-level employees: 150% of their annual salary
- Cost of replacing high-level or highly specialized employees: 400% of their annual salary
These following costs always go along with each replacement:
- Cost of recruiting
- Cost of onboarding
- Cost of training
- Cost of lost productivity
- Cost of decreased employee morale
- Cost of customer dissatisfaction
I also wrote an article about this issue The Real Cost of Employee Turnover You May Never Think About
Hope this helps.

From Vietnam, Hanoi
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