The calculator of employee turnover costs uses the following formula: voluntary terminations * (Avg. annual salary * (Cost of replacement / 100)). Total costs are calculated as a sum of the turnover cost for all groups of positions. The cost of replacement can by changed by clicking on the 'Modify cost of replacement'.

Financial

• HR staff time (exit interview, payroll administration, benefits)
• Manager’s time (retention attempts, exit interview)
• Accrued paid time off (vacation, sick pay)
• Temporary coverage (contingent employee, overtime for remaining employees)

Other

• Delays in production and customer service; decreases in product or service quality
• Lost clients
• Clients not acquired that would have been acquired if employee had stayed
• Stiffer competition as employee moves to a rival company or forms own business
• Contagion (other employees decide to leave; for example, to join defector at his/her new organization)
• Disruptions to team-based work
• Loss of workforce diversity

Replacement Costs

• New hire’s compensation
• Hiring inducements (signing bonus, reimbursement of relocation expenses, perks)
• Hiring manager and unit/department employee time
• Orientation program time and materials
• HR staff induction costs (payroll, benefits enrollment)

Training Costs

• Formal training (trainee and instruction time, materials, equipment)
• On-the-job training (supervisor and employee time)
• Mentoring (mentor’s time)
• Socialization (other employees’ time, travel)
• Productivity loss until replacement has mastered job

Source: Society for Human Resources Management