[Turnover and attrition](https://www.teampredict.ai/glossary#turnover) # What is the cost of turnover? Also called replacement cost, cost per departure Definition The cost of turnover is the full cost of replacing one leaver: recruiting spend, interviewing time, onboarding, the new hire's ramp period, manager time and any temporary cover. Last updated October 13, 2026 ## The cost of turnover adds up everything one replacement takes. Some of it is visible spend: job ads, agency fees, background checks. Much of it is time: hours spent interviewing, onboarding and covering the empty seat, and the months a new hire spends getting up to speed. Also called replacement cost or cost per departure, it is a figure per leaver. Multiply it by the number of leavers to get an annual cost. ## A cost figure is what gets a retention project funded. It converts a percentage into a budget line, which is what turns a retention project into a funded one. Build the figure from your own salaries and time, not a headline multiple from an article. ## You calculate it by adding up each part of the replacement. - Recruiting: job ads, agency or referral fees, and recruiter time. - Interviewing: the hours of every interviewer, at their hourly cost. - Onboarding: training, equipment and the time of whoever trains the new hire. - Ramp period: the output lost while the new hire gets up to full speed. - Manager time: the hours the manager spends on the exit, the search and the handover. - Temporary cover: overtime, contractors or agency staff while the seat is empty. Formula Annual cost of turnover = cost per leaver × number of leavers ## Here is a worked example with round numbers. Take an invented role paid $60,000 a year. Replacing one person in it cost $4,000 in recruiting, $2,000 of interviewing time, $3,000 of onboarding, $10,000 of lost output during the ramp period, $2,000 of manager time and $4,000 of temporary cover. _Figure: The cost of replacing one person in an invented role paid $60,000 a year: $10,000 of lost output during the ramp period, $4,000 of recruiting, $4,000 of temporary cover, $3,000 of onboarding, $2,000 of interviewing time and $2,000 of manager time. The total is $25,000 per leaver, and 10 leavers a year cost $250,000._ That is $25,000 per leaver. With 10 leavers from similar roles in a year, the annual cost of turnover is $250,000. The same $25,000 is about 42% of the $60,000 salary. Expressing the cost as a share of salary is handy for a calculator, as long as the share comes from your own numbers. ## These mistakes make the cost look smaller or bigger than it is. - Counting only the agency fee and ignoring time, which is often the larger share. - Borrowing a headline multiple of salary from an article instead of building the figure from your own salaries and time. - Forgetting the ramp period. A new hire is on full salary long before they deliver full output. - Using one figure for every role. Replacing a specialist costs more than replacing an entry-level role. - Presenting the cost without the [turnover rate](https://www.teampredict.ai/glossary/turnover-rate) behind it, so nobody can check the number of leavers. ## Find out what turnover is costing you. Put a number on it in about two minutes with the free turnover cost calculator, using your own headcount, average salary and turnover rate. [Calculate your turnover cost](https://www.teampredict.ai/tools/employee-turnover-cost-calculator) Free, no signup required. ## These related terms are in the glossary too. - [Cost of a bad hire](https://www.teampredict.ai/glossary/cost-of-a-bad-hire) The cost of a bad hire is what a hire who does not work out costs you in total, from sourcing and onboarding through lost productivity, manager time, exit and re-hiring. - [Employee turnover](https://www.teampredict.ai/glossary/employee-turnover) Employee turnover is the movement of people out of a company over a set period, counted as the employees who leave and are replaced. - [Turnover rate](https://www.teampredict.ai/glossary/turnover-rate) The turnover rate is the percentage of your workforce that left during a period. - [Dysfunctional turnover](https://www.teampredict.ai/glossary/dysfunctional-turnover) Dysfunctional turnover is a departure that damages the organization: a high performer, a specialist, or someone hard to replace at any price. - [Regretted attrition](https://www.teampredict.ai/glossary/regretted-attrition) Regretted attrition is a departure the company did not want: someone whose performance, skills or relationships you would have paid to keep. - [Staff turnover](https://www.teampredict.ai/glossary/staff-turnover) Staff turnover is the same measure as employee turnover, and is the more common phrasing in the UK, Ireland, India, Australia and much of the Commonwealth. ## These pages on this site go deeper. - [The real cost of turnover](https://www.teampredict.ai/blog/cost-of-employee-turnover) About TeamPredict TeamPredict is retention early-warning software that flags resignation risk from public LinkedIn signals, so you have lead time to keep the people you want to keep. [See how TeamPredict works](https://www.teampredict.ai/retention-software) [Back to the HR glossary](https://www.teampredict.ai/glossary#cost-of-turnover), where all 52 terms are defined.