instruction · evidence-based answer
How do I calculate the cost of employee turnover?
The short answer
Add the components, do not guess a multiple: separation costs (exit processing, unused PTO), vacancy costs (coverage, lost output while the seat is empty), recruiting costs (sourcing, interviewing, agency fees), onboarding and training, and the ramp cost of a new hire performing below full productivity for months. Estimate each from your own roles, and keep the assumptions visible so the total is auditable — a defensible figure is one a skeptical CFO can trace, not a headline number.
The problem underneath
Managers are asked to justify retention spend but lack a transparent method to convert a departure into a dollar figure they can defend.
Go deeper
Related questions
- What is the formula for turnover cost?
- How do you quantify the cost of losing an employee?
Stop re-deriving this by hand. Run the turnover-cost method on your numbers — A transparent, component-by-component estimate you can defend in a business case.