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For the organisation

Employee turnover cost calculator

The resignation is the cheapest part. Search fees are the only figure that reaches the board, and they are roughly a fifth of what the departure actually costs. Move the two inputs. Every multiplier is written down below, so you can argue with the ones you think are wrong.

£120,000
1

This models one departure per person at that level, in a single year. If your senior turnover is lower than that, scale it down. If you have lost two directors in eighteen months, the figure is not the argument. The pattern is.

Total cost of replacement

£0

What the departure looks like, against what it is
Two bars on one scale comparing one year of base salary with the total cost of replacing the role. Exact figures are in the table below.
A year of the salary you were paying £0
What losing them costs £0
Where it goes
Component Of salary Cost
Recruitment and search fees 25% £0
Onboarding and ramp-up 50% £0
First-year productivity gap 100% £0
Team disruption 30% £0
What the board is told

"She had a great offer. These things happen at this level."

Recorded as a recruitment cost, closed as an item, and never connected to the eleven months before it.

What she told her friends

"I stopped being able to think clearly in that job about a year ago."

Which was visible, was survivable, and was cheaper to address then than the figure above.

How the cost of employee turnover is calculated

Turnover cost is not the recruitment invoice. It is four separate costs that arrive at different times, and only the first one generates a document anybody sees.

  1. Replacing them. Search or contingency fees, advertising, and the management time that goes into shortlisting and interviewing. This is the visible figure and the smallest of the four.
  2. Onboarding and ramp-up. Salary paid across the months before the new person is doing the whole job. Nobody is unproductive on purpose; the role simply takes time to learn.
  3. The productivity gap. The output of the role, largely absent for roughly a year at senior level. This is the largest single component and the one that never appears in a budget line.
  4. Team disruption. Cover, delayed decisions, and the people who follow them out. A senior departure is rarely the only one.

Added together, the multipliers used on this page come to roughly 205% of base salary for a senior role. That is the answer to "what does it cost to replace an employee" once you stop counting only the invoice. Every one of the four is stated below so you can raise or lower it against your own experience.

The multipliers, so you can challenge them

These are mid-range figures for senior roles, not a study of your organisation. A finance director's first instinct is to test the assumptions, which is the correct instinct, so here they are rather than buried in the code.

Absence has the same shape and its own page: what sickness absence really costs.

Want this with your own assumptions written out?

I will send the breakdown with every multiplier stated, so you can put it in front of a finance director without having to defend a number you cannot source.

Retention is not a benefits question at this level.

Senior people rarely leave over pay. They leave when the job has stopped being survivable and there was nobody to say so to. The assessment finds out which of yours are close to that, before it becomes the number above.

Start the conversation

Questions people ask before they call

How do you calculate the cost of employee turnover?
Add four costs, not one. Recruitment and search, onboarding and ramp-up, the first-year productivity gap, and team disruption. Only the first generates an invoice, and it is the smallest of the four. On the mid-range multipliers used here they total roughly 205% of base salary for a senior role.
What does it cost to replace an employee?
For a senior role, roughly twice base salary once every component is counted. The recruitment fee people quote is about a quarter of base salary, which is why the reported figure and the real one differ by so much. Move the salary slider on this page to see it against your own numbers.
Why is turnover more expensive than the recruitment fee?
Because the fee buys a person, not their output. The role still has to be learned, and at senior level that takes close to a year during which the salary is paid and the job is only partly done. Meanwhile cover falls on the people around them, and some of those people leave too.
Are these multipliers accurate for my organisation?
They are mid-range figures for senior roles, not an audit of your organisation, and they are stated openly here so they can be challenged. A finance director should test them. If your search costs are lower or your ramp-up is shorter, lower them and the total moves accordingly.
What is the difference between turnover cost and absence cost?
Turnover cost is paid once per departure and is large. Absence cost is paid continuously and is mostly invisible, because the largest part of it is people working while unwell rather than staying at home. Both are modelled on this site; the absence side has its own calculator.