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Calculating the Cost of Turnover

Few executive-level employees understand how much money their organizations lose by failing to retain key employees.  Here is your chance to calculate the cost of losing one of your organization’s most influential performers.

Select a job that has been experiencing a high turnover rate.  Calculate the full cost of that job by entering the average wage for that position on Line 1 and then multiplying it by 130% to include benefits costs.  Next, multiply the total wage by 25%.  This cost per employee may then be multiplied by the number of ex-employees in the same job on Line 6 to arrive at the total cost of turnover in this position.

Here are the steps:

  1. Annual wage             $__________
  2. Gross-up for benefits              x  1.30
  3. Total wage                $__________
  4. Turnover cost                           x  0.25
  5. Cost per employee  $__________
  6. Ex-employees          x __________
  7. Total turnover cost $__________


  1. Manager’s Salary           $67,480
  2. Gross-up for benefits   x 30
  3. Total wage                      $87,724
  4. Turnover cost                x 25
  5. Cost per manager         $21,931
  6. Ex-managers                 x 10
  7. Total turnover cost      $ 219,310

While this seems like a simple calculation, most organizations do not know their turnover costs. The cost of turnover impacts your organizations profits, so I encourage you to figure out how much you are spending today and work on a plan to reduce these costs and add to your bottom line in the future. Make 2017 a year to retain employees so that you don’t have to continue to calculate the cost of turnover!

For additional information on the cost of your organizations turnover please contact us at www.newfocushr.com .

Written by:  Kristen Deutsch, M.B.A., CCP







New Focus HR is a human resources consulting and training company that services all organizations. Our expert team collaborates with businesses to attract, motivate, retrain and retain their biggest assets, employees. While engaged with an organization, our focus is to find solutions that improve the company’s internal HR-related practices while increasing results at the same time! Our focus. Your results.