Measure replacement cost across the vacancy period, recruiting and onboarding, temporary coverage, internal time, and productivity ramp after the new employee starts.
About this analysis
The calculation builds turnover cost from operating and financial drivers rather than applying a generic percentage of salary. BLS compensation data provide external context for loaded compensation, while the actual model remains organization-specific.
Learn more about our Labor Cost Optimization practice.
Define the employees being replaced and the operating exposure before replacements start.
Capture direct replacement spend and the productivity cost that continues after the new employee starts.
Total turnover cost
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Full modeled replacement-cycle exposure
Cost per employee replaced
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Total cost divided by employees replaced
Cost vs loaded payroll
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Turnover cost ÷ annual loaded payroll replaced
Exposure period
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Vacancy + ramp period
The bridge separates the economic loss created by missing capacity from the cash costs of covering, recruiting, onboarding, and supporting the replacement.
ILLUSTRATIVE CALCULATION RECORD — EMPLOYEE TURNOVER COST Employees replaced: 5 Average annual base salary: $75,000 Employer burden / benefits: 30.0% Vacancy period: 6 weeks Temporary capacity recovered: 40.0% Temporary coverage cost per week: $1,000 Recruiting cost per hire: $6,000 Onboarding cost per hire: $2,000 Ramp period after start: 8 weeks Average productivity during ramp: 60.0% Manager / peer hours per hire: 30 Internal hourly cost: $60 Separation cost per employee: $1,000 ILLUSTRATIVE RESULTS Loaded annual cost per employee: $97,500 Vacancy-period capacity loss: $33,750 Temporary coverage cost: $30,000 Recruiting + onboarding cost: $40,000 Ramp productivity loss: $30,000 Internal time cost: $9,000 Separation cost: $5,000 Total turnover cost: $147,750 Turnover cost per employee replaced: $29,550 Turnover cost as % of replaced employees' annual loaded payroll: 30.3% Vacancy + ramp exposure period: 14.0 weeks No universal turnover-cost percentage is used. Organization assumptions drive the calculation; BLS March 2026 compensation data are shown only as sourced compensation context. JavaScript replaces this illustrative record with the visitor's current assumptions.
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