What does employee turnover cost you?
This Employee Turnover Cost Calculator provides a structure to establish the costs associated with your levels of employee turnover and will allow you to determine how much impact employee turnover is really having on your bottom line.
Employee Turnover Cost Calculator
We all recognise that employee turnover is often destructive, time consuming and costly. Most will be familiar with quotes of abstract numbers from blog articles, CIPD website reports, etc. But it is not always high on the "must fix" list of HR and senior management and leadership teams as it is sometimes difficult to try and establish a "true" cost for your own organisation.
This Employee Turnover Cost Calculator also shows you how much money can be saved for every percentage improvement you can make in your employee retention efforts. Each time you calculate your costs, we'll generate a 10-Point Personal Employee Turnover Report and we'll even email you a copy of it as well! The results will help you create a compelling business case, backed up with your own numbers so that you can convince others that addressing employee turnover is a "must".
Your Personal 10 Point Employee Turnover Report
Thank you , a copy of the report has been sent to your email address:
There are 10 sections to your personal cost of employee turnover report that breaks down the data you have provided to give you an idea of costs in each area:
- About Your Company
- About Your Hires
- Costs Due To An Actual Employee Leaving
- Hiring Costs
- Onboarding Costs
- Loss Of Productivity Costs For New Hires
- Your Employee Turnover Cost Summary
- Our Recommendations
- What Could Your Savings Look Like?
- What To Do Next?
1. About Your Company
This section reviews some of the key information that you have provided about your organisation and helps you to compare your overall level of employee turnover to the average.
Number Of Employees = current employees
Approximate Employee Turnover = % (The average is 15% to 18% reported by the job board Monster and absence management company e-days.
Approximate Number Of Leavers = leavers over 12 months
Number Of Headcount Growth Employees = new employees
The calculated number of leavers is an important consideration and you should track this data over the next 12 months and also review if the number of leavers is voluntary or involuntary. This, perhaps combined with exit interviews, will help you to understand some of the reasons behind your employee turnover.
2. About Your Hires
This section helps you to understand some of the (often) hidden costs about your employees and their salaries. We've included a calculation based on the average salary to help you to determine the additional costs to salary that employee benefits add, as well as monthly and daily costs of each employee in your business (expressed as an average).
Average Salary = £/$
Benefits Cost = £/$ (This covers things like bonuses, cars, fuel allowance, benefits package, pension contributions, etc.)
Monthly Salary Cost = £/$
Daily Salary Cost = £/$
3. Costs Due To An Actual Employee Leaving
This section looks at some of the costs that arise when an employee actually leaves the business. The main focus is on the cost of covering the vacancy until it is filled again. However, you may find that there are also additional costs that may need to be considered such as severance fees, exit interviews, etc.
Daily Cost To Cover Vacant Slot (Temp Fees) = £/$
Number of Days to Cover Vacant Slot = Days
Total Cost To Cover Vacant Slot = £/$
If no temporary cover is put in place, then you've lost days of productivity, so at least £/$ based on the previous employees average salary.
4. Hiring Costs
Actual hiring costs are the costs most likely to be visibly linked to costs of employee turnover. Below we have calculated the average cost to hire for a vacancy.
HR or Hiring Manager Salary = £/$
Hourly Rate of HR or Hiring Manager = £/$
Time Spent Screening = Hours
Time Spent Interviewing = Hours
Total Hours used To Fill One Vacant Slot = Hours
Cost Of Recruitment = £/$
Agency Fees @ % = £/$
Cost To Hire Per Vacancy = £/$
5. Onboarding Costs
Less obvious sometimes are the costs involved in bringing a new employee in to the business and getting them trained to the required standard. Each job role and organisation will have a different requirements, but it is important to try and identify an average.
Trainer or Managers Salary = £/$
Daily Rate For Trainer = £/$
Total Training Days = Days
Total Training Cost of New Hire = £/$ (This number could be lower depending upon how many new employees undertake training at the same time)
6. Loss of Productivity Costs For New Hires
These costs are often overlooked when looking at the costs of employee turnover. Again, different employees, job roles and organisations will have different learning curves that impact on productivity. However, understanding that it will take some time for a new employee to get up to speed is important and does carry an associated cost.
Number of Days Probationary = Days (Typically it can take as long as 24 weeks / 6 months to get a new employee up to the expected productivity as reported by Unum)
Productivity Loss = % Effective In The Role
New Hire Productivity Loss = £/$
7. Your Employee Turnover Cost Summary
Having taken all of the above factors and costs into consideration, here is our summary of what employee turnover costs your organisation each year.
Potential Cost Of A Bad Hire = £/$ (Every time there is a hiring mistake your business is likely to incur this cost)
As a % of Salary = % (This figure represents the cost of a bad hire as a percentage of the average salary and gives you a useful indication as to the importance of good hiring decisions)
Your Current Employee Turnover Cost = £/$ (This is the potential annual cost of your employee turnover)
Your Risk On New Hires This Year = £/$ (If your organisation is looking at expansion over the course of the next year, then this figure outlines the potential cost of risks in recruiting these new employees)
8. Our Recommendations
Based on the information you have provided, here is a comparison of how your employee turnover compares to our knowledge of industry averages:
Employee Turnover Rate =
Potential Cost Of A Bad Hire = £/$
9. What Could Your Savings Look Like?
To assist you in building a business case for addressing employee turnover, we have calculated some scenarios to help illustrate the possible savings and benefits to your organisation by implementing a solution to this challenge.
– If using Big 5 Assessments in your recruitment process could save you just one bad hire in a 12 month period, then you could potentially save £/$
– If using Big 5 Assessments in your recruitment process could reduce your employee turnover costs by 20%, then you could potentially save £/$ (Typically our clients are able to reduce employee turnover costs by up to 40% in the first year).
The table below shows the savings we could help you make with just a small reduction in your employee turnover costs:
| Your Current Employee Turnover Rate | Your Current Total Cost Of Turnover | Cost Saving |
|---|---|---|
| % | £/$ | £/$ Nil |
| Employee Turnover Reduction | Total Cost Of Turnover | Cost Saving |
| 1% | £/$ | £/$ |
| 2% | £/$ | £/$ |
| 5% | £/$ | £/$ |
10. What To Do Next?
Clearly you may need some time to consider these results, share with colleagues and possibly use the calculator again and refine the results. We can support you in a number of ways and would be delighted to talk with you to really understand the challenges you face. Click here to speak with an expert.
Alternatively, you may be ready to change your recruitment processes and use Big 5 Assessments to reduce staff turnover and increase organisational performance. Big 5 Assessments will help you:
- Save Money
- Improve Profitability
- Reduce The Burden on HR
- Reduce Recruitment Risks
- Improve Hiring Manager Satisfaction
- Improve Quality Of Hire
Big 5 Assessments offers a simple and affordable way to help you start addressing employee turnover challenges. It typically takes less than 15 minutes to get a account set up and to be able to start assessing candidates and thereby reducing your employee turnover costs straight away.
To find out how much implementing Big 5 Assessments will cost, why not request a quote and we will provide you with a full price proposal without obligation.