Turnover Cost Estimator
Turnover costs can quietly drain your organization’s resources, impacting productivity, morale, and your bottom line. Understanding the true cost of replacing employees is the first step toward building a more efficient and cost-effective hiring strategy. Our Turnover Cost Estimator takes the guesswork out of calculating these expenses, giving you a clear picture of where your hiring dollars are going. Whether you’re managing entry-level roles or specialized positions, this tool will help you identify areas for improvement and make data-driven decisions. Let’s get started and see how much turnover is costing your business—and how you can reduce it!
Imagine a retail store with entry-level employees earning $16 per hour. Recently, 2 employees left, and management needs to calculate the cost of replacing them. Here’s how the store would use each field:
Hourly Wage: Enter 16 for the retail worker’s hourly rate.
Separation Cost: HR spends around $500 on each exit (e.g., paperwork, interviews). Enter 500.
Recruiting Cost: It costs $300 to advertise, and the HR recruiter spends 10 hours at $25/hour. Total recruiting cost = $300 + ($25 x 10) = 550.
Training Cost: Trainer spends 20 hours at $20/hour, plus $100 for materials, and lost productivity during training is 50% productivity for 40 hours. Total training cost = $400 + $100 + $320 = 820.
Lost Productivity: New hires usually operate at 75% productivity for the first month, so lost productivity is estimated at 25% of the 1st month’s salary. Enter 25.
Number of Employees Turned Over: Since 2 employees left, enter 2.
After filling out the fields, click Calculate Total Turnover Cost to see the estimated total turnover cost for replacing these employees.
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The Turnover Cost Estimator is a tool designed to calculate the total financial impact of employee turnover. It accounts for key factors such as separation costs, recruiting costs, training expenses, lost productivity, and the number of employees being replaced. The results help you understand the true cost of turnover and take steps to reduce it.
This tool is ideal for:
- HR Professionals: To understand the cost of turnover and justify budgets for hiring and retention strategies.
- Business Owners and Managers: To identify inefficiencies and reduce expenses related to employee turnover.
- Recruitment Specialists: To assess and optimize hiring practices based on cost insights.
To calculate turnover costs, you’ll need to provide the following:
- Hourly Wage ($): The hourly wage of the employee(s) being replaced.
- Separation Cost ($): Costs associated with employee departures, such as exit interviews and administrative tasks.
- Recruiting Cost ($): Total expenses related to finding and hiring a replacement, including advertising, recruiter time, and referral bonuses.
- Training Cost ($): Costs associated with onboarding and training new employees, including materials and trainer time.
- Lost Productivity (% of 1st Month’s Salary): The estimated percentage of the first month’s salary lost due to decreased productivity during onboarding.
- Number of Employees Turned Over: The number of employees being replaced.
The calculator uses the following formula:
- Annual Salary = Hourly Wage × 40 hours/week × 52 weeks/year.
- Monthly Salary = Annual Salary ÷ 12 months.
- Lost Productivity Cost = (Lost Productivity % ÷ 100) × Monthly Salary.
- Turnover Cost per Employee = Separation Cost + Recruiting Cost + Training Cost + Lost Productivity Cost.
- Total Turnover Cost = Turnover Cost per Employee × Number of Employees.
While turnover costs vary by industry, $20,000 or more in total costs or 10 or more employees turned over is generally considered high. Businesses with high turnover may benefit from exploring tools and strategies to streamline hiring and reduce attrition.
Lost productivity is calculated as a percentage of the first month’s salary. For example, if a new hire operates at 75% productivity during their first month, the calculator assumes a 25% productivity loss and includes this cost in the total turnover estimate.
If your turnover costs exceed $20,000 or you’ve experienced 10 or more turnovers, the calculator will recommend requesting a demo of recruitment solutions to help manage and optimize hiring processes. High turnover signals a need for advanced tools to address hiring inefficiencies and retention challenges.
If your turnover costs are below the threshold, the calculator will recommend subscribing to our newsletter. The newsletter provides actionable tips and strategies to help reduce turnover costs and improve employee retention.
Yes, the calculator can be used for entry-level, managerial, and specialized roles. However, the cost assumptions (e.g., recruiting and training costs) should be adjusted based on the role’s complexity and requirements.
Yes! The Turnover Cost Estimator is completely free and doesn’t require any sign-up to use.
The calculator provides an estimate based on the values you enter. The accuracy depends on the quality and relevance of the inputs. While the results are not exact, they offer a reliable starting point for evaluating turnover costs.
Some proven strategies include:
- Improving Retention: Focus on employee engagement, career development opportunities, and competitive compensation.
- Streamlining Recruitment: Use tools to optimize your hiring pipeline and reduce time-to-fill.
- Reducing Attrition: Address root causes of employee dissatisfaction, such as workload or management practices.
Yes! You can copy the results or take a screenshot to share with your team. Use the insights to align your team around strategies to reduce turnover costs.