Employee Turnover Costs: 4 Overlooked KPIs To Measure In 2017 [INFOGRAPHIC]

Feb 3, 2017 3:50:02 PM / by Involvesoft Marketing

Employee Turnover Costs Infographic

Variables to quantify employee turnover costs

Numerous industries and verticals face massive challenges when it comes to retaining their top talent, and reducing employee turnover costs of their organization. Although, having a certain level of turnover is healthy in terms of gaining new talent insight, and maintaining an innovative culture. Note that a the typical Human Resource manager is far from quantifying the average employee turnover rate.

Employee turnover costs of time and lost of productivity directly impacts your profit lines, just as important as paying cash to vendors for services such as advertising. To succeed, consider the following formula and list as a guide:

Total Employee Turnover Costs = (cost of an employee leaving the company + recruiting cost + training cost + productivity cost) * (amount of time the position remains open)

  • Cost of an employee leaving the company
    • Finding the right replacement can take weeks if not months to find. Forecast the cost of the individual for temporarily covering that position.
    • Identify the cost of lost productivity at 100%, assuming the position is vacant for a period of time. Contemplate whether the vacancy overlaps multiple departments and how that ripples project timelines.
    • Estimate the cost of an exit interview, includingthe administrative expense of stopping payroll, and benefit compensation.
    • Finding a perfect replacement is possible, although not so common. Therefore, calculate the cost of training invested in the individual. Before you let that person walk out the door, make sure you understand the value of their network as well.
    • Include the insurance premium expenses and time your employees spent to carry out the unemployment claim on your behalf.
  • Recruiting Cost
    • Quantify recruitment advertising cost, including the cost of internet posting if it is carried out organically. Organic posting should be calculated by the employee’s time spent on publishing recruitment materials across different channels.
    • Consider the time of analyzing the number of applications, in addition to the actual interview carried out.
    • Account cost and time spent on analyzing pre-employment test for that position. Such as skills, abilities, attitude, aptitude, behavior, and values.
  • Training Cost
    • Identify the cost of departmental training cost in addition to the onboarding process and materials.
    • Forecast the amount of supervisory time spent on assigning, explaining, and reviewing work assignments and output. Which must also include the supervisor’s lost productivity.
  • Productivity Cost
    • Calculate the opportunity cost of an employee getting up to speed. This cost must be benchmarked against the performance of the individual who left the position vacant. Therefore, quantify the amount of time the new hire has spent to leverage the same results.
    • Quantify the cost of mistakes the new employee makes.
      Include the lost of department productivity as a whole, especially if the filled position covers a managerial role as well.


The cost and impact associated each time someone parts ways with the company should be carefully analyzed. Utilize the items above to complement the total opportunity cost leveraged by your company. Dig deeper and understand the elements that differ your particular industry niche to understand the true employee turnover costs of your company.

At Involve, we strive to find the latest trends that overlap between employee engagement and corporate giving strategies. Now that you are aware of the financial cost to be analyzed when it comes to employee turnover costs, improve your retention and discover 5 simple ways to motivate your employees today.

Download Now - Employee Engagement Whitepaper

  • [1] Bliss, William G. "The Cost of Employee Turnover." Alexander Porter. 2015. Web.

Topics: Reducing Employee Turnover, Employee Retention