The Cost of Turnover

Turnover can be very costly for your organization by presenting both direct and hidden costs. Yet, turnover provides you with one of the few objective, data-driven metrics that enable you to measure employee engagement and the overall health of your organization.

To calculate how much turnover is costing your organization, use our turnover assessment calculator.

Bottomline Costs of Turnover

The Society of Human Resources Management (SHRM) estimates that to replace a salaried employee costs 8 months’ salary on average.

The Total Cost of Turnover = Annual Turnover Rate x Total Number of Employees x Turnover Cost Per Employee

Given the annual turnover rate of 20.6%, if you have, for instance, 100 employees, your total turnover cost = 0.206 x 100 x $53,237 = $1,096,682

Here's the math: To calculate the total cost of employee turnover for a year in the Metro DC market, you would typically multiply the number of employees who leave (which is determined by the annual turnover rate) by the cost to replace each employee.

1. Annual Turnover Rate: The turnover rate in the Metro DC market is 20.6%. This means that, on average, 20.6% of employees leave their jobs and need to be replaced each year. 

2. Annual Salary: The average annual salary in the Metro DC market is $79,856. 

3. Annual Cost to Replace Each Employee: The cost to replace each employee lost as 8 months' salary is $53,237

Reducing Turnover = Savings

Our goal is to help you learn what is going on in your organization and mitigate the cost of turnover. OUR PROMISE: Reduce turnover by 5% to 10% within the first year. Here are the savings you would realize annually:

Monetary costs are not the only issue with retention. Calculating the direct costs to your organization is easy to calculate with our interactive tool, but the HIDDEN COSTS are what can cripple your company. Did you know that the most common factor in turnover is poor management?

Watch for our next communication to learn about the hidden costs of turnover.