What is Your Organization's Cost of Turnover?
We compiled a collection of Cost of Turnover studies for you to use as a guide. The HiringSmart Cost of Turnover Calculator formulas are based on the average costs from the independent research listed below.
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Source
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Turnover Cost of an $8/Hour Employee
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Turnover Cost of an $80K Salaried Manager
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Documentation and Supporting Material
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Society for Human Resource Management
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$3,500
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$70,000
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Uncovering turnover costs can be a wake-up call, as it was for Walter Kalinowski, Director of HR for a company with 53 truck plazas. "We were hiring 200 employees per pay period. It was out of control. We had trouble finding people," said Kalinowski. He discovered his per-employee turnover cost was $3,500.
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Coca-Cola Retailing Research Council
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$3,637
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$72,740
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A major study of the employee turnover problem in the supermarket industry estimated total direct and indirect costs of replacing a supermarket cashier earning $6.50 per hour was at least $3,637.
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Cornell University Hotel School
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$5,688
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n/a
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Front Desk clerk, Miami hotel.
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Legislative Update, Alaska State Senator Kim Elton
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$8,000
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$100,000
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Hiring and training a new employee can cost from 50% to 200% of the position's annual salary.
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Hay Group study
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$8,000
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$120,000
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The cost of replacing workers range from six months of an hourly worker's salary to 18 months salary of a professional employee.
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Workforce Magazine – Survey on Employee Turnover
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$10,000
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n/a
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45% of responding companies indicated that turnover costs are more than $10,000 per employee.
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Cornell University Hotel School Study
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$11,609
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n/a
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Front desk employee, Hotel in New York City
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Saratoga's Human Resource Financial Report
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$16,000
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$104,000
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Average turnover cost equals one year's salary and benefits. This can vary widely, depending on industry, with costs much higher for retail.
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Bliss & Associates Inc., Wayne, NJ consulting firm
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$24,000
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$200,000
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Costs of lost productivity are as important as direct costs, such as advertising or temporary staff. Total costs easily reach 150% of the annual compensation. The cost will be significantly higher (200% to 250%) for managerial and sales positions.
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Research Average – Cost of Turnover, per departing employee
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$9,523
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$108,963
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Research Average – Percentage of annual salary
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60%
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136%
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Each assessment tool is designed for a specific purpose. Use it for that purpose and she'll be able to rely on the outcome but don't try to use it outside of its range.
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Myth #4: First impressions are everything. A candidate needs to impress me in the first five minutes.
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