Cost of Employee Turnover

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Summary: The Cost of Employee Turnover mini tool will help you grasp the cost of employee turnover at your company. It’s a simple tool that requires very few inputs but is rich in quantitative feedback and perspective. All you need to have are estimates of your:

  1. number of employees,
  2. annual turnover %
  3. average salary.
  4. estimated profits
  5. a target % for turnover improvement (reduction)
None of the information you enter is retained by KRM or shared with any outside third parties.

By completing the KRM Cost of Employee Turnover you will receive:

  1. The current Cost of Employee Turnover at your company per exiting employee
    • Annual number of employees hired due to turnover
    • Component turnover costs
    • The cost of hiring a new employee at your company
  2. The Total Cost of Employee Turnover at your company
  3. The Total Cost of Employee Turnover relative to your profitability
  4. Improvement measures for the financial benefits due to reducing employee turnover
    • Improved profitability
    • Improved profitability as a % of current profitability
    • Number of salaries saved
Instructions: Fill in the white boxes below to find your results. (The white boxes will turn burnt orange and be ready for input when you put the cursor over them). Once you have filled in the white boxes use the results to frame your budget or strategic discussions around retention and reducing the cost of employee turnover.
Number of Employees (full time equivalents or FTEs) Total Turnover Cost
Turnover Percentage
Annual # of employees hired due to T/O Annual Profit
Average Salary per FTE Turnover Cost/Profits
Costs per New Hire
Formal Training
Vacancy Costs Target % Turnover Reduction
Recruiter Costs
Internal Hiring Costs Profit Improvement
Post Hire Costs Profit Improvement %
OJT Costs
# of Salaries Saved
Total Cost of New Hire

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