What is employee turnover costing your business?

How to calculate employee turnover.

Turnover rate is the simplest number in the set, and it is worth working out before you touch the dollars. Divide the number of people who left during the period by the average number of people employed over that period, then multiply by 100:

Turnover rate (%) = (departures ÷ average headcount) × 100

So a business averaging 25 staff that lost four people over the year is running at 16%. Count everyone who left, then run it again counting only the people you did not want to lose, because those two numbers tell very different stories and only the second one is a culture problem.

The cost side is the same arithmetic applied to salary. Multiply your departures by the average salary, then by the replacement-cost multiplier that fits the seniority of the roles, which the research puts between 0.5 and 2.0. That is exactly what the calculator above is doing.

• Turnover rate: departures ÷ average headcount × 100
• Cost of turnover: departures × average salary × replacement multiplier (0.5 to 2.0)
• Regretted turnover: run the same rate counting only the departures you did not want, which is the number that should worry you

Where the money actually goes.

Published research consistently puts the full cost of replacing an employee between 50% and 200% of their annual salary, and the spread comes down to seniority and scarcity. The bill is made of four parts:

• Recruitment: agency fees of 15% to 25% of salary, or weeks of your own leaders' time running the search
• The empty seat: work not done, clients covered thinly, and overtime absorbed by the rest of the team
• The ramp: three to six months before a new hire performs at full speed, on full pay
• The drag: the knowledge that walked out, the clients who followed it, and the teammates who start wondering why people keep leaving

The number nobody puts in the budget.

A 25-person business on average salaries losing four people a year is carrying a turnover bill somewhere between $170,000 and $680,000, and none of it appears as a line item. It lands as recruiter invoices in one month, missed revenue in another, and a flat quarter nobody can quite explain.

That is why turnover is the first place to look when culture work needs a business case. Culture is not the soft side of the P&L; retention is one of the few levers where a measurable improvement pays for the program that produced it, usually several times over, in the same year.

From the number to the fix.

The calculator tells you the size of the leak, not the cause. The free Culture Checkup covers the cause: eight questions across retention, hiring, feedback, recognition, leadership and energy, with an instant read on where your culture is losing people. From there, the fixes are systems, not slogans: onboarding that lands people properly, feedback rhythms that surface problems while they are still conversations, and recognition that gives your best people a reason to stay.

Common questions.