Hi Shanti,
This is a interesting question, when it comes to replacing an employee the important thing is for which position. Normally when it comes to replacing a senior person the cost of replacement might be more compared to the one in junior level. For example in one of the company the assistant manager resigned in december and they got the correct replacement only after six months, here you can easily imagine that the cost incurred is more. But if you take it to a replacement for a Junior level you can get many people walking-in and the cost for replacement will be much less compared to the other case.
When it comes to the question of what we can analyse, by taking the same example of getting replacement of a assistant manager you need to understand how important is he for the team, how was is performance and so on.... based on that you need to first decide is he worth to be retained than you can easily use that cost of replacement to retain that employee. If not the other option is you need to go for replacement without thinking of cost of replacement because the outcome would be beneficial for your company.
Hope you have got some idea about this now and keep posting such questions it is really a good one for discussion.
Regards
Amith R.