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TalentKeepers Turnover Cost Calculator
The high costs of losing talented workers reach far and deep into organizations. These costs include direct costs such as hiring and training replacements, as well as indirect costs such as lost business and productivity.
The TalentKeepers Turnover Cost Calculator is offered to assist organizations in developing fine-tuned estimates of these costs. The Calculator contains helpful detailed categories to itemize turnover's financial impact, along with some shortcuts for estimating these costs that are both reasonable and conservative.
While there are various ways of estimating the cost of losing a valued worker, most important is that executives agree that the final cost estimate is accurate. Only then can organizations use the resulting cost as a tracking tool to measure turnover's real cost, along with real savings as turnover is reduced. This Calculator is offered to foster agreement among those executives, as it will produce a comprehensive, measurable cost that is legitimate, defensible, and yet conservative so all can agree. The resulting cost of turnover can then be used to calculate an accurate return on investment for all employee retention initiatives.
The calculator is presented in two sections, the first for direct costs and the second for indirect costs.
STEP 1 - Direct Costs
Direct turnover costs are those costs that result from actions to exit employees who are leaving and then hire and train their replacements. These costs are typically easier to measure than the indirect costs. Below is a model for calculating these costs.
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Some line items contain costs for services which are easily quantifiable such as:
3. Separation Pay
7. Temporary Help
8. Overtime
11. Advertising
12. Recruiting Agency
13. Recruiting Incentives
15. Selection Incentives
16. Background Check
17. Drug Test
Other line items contain costs which require estimating or measuring the costs of time invested by various personnel such as:
1. Exit Interviews
25. Orientation
26. Training
ShortCut:
A wide range of studies estimate the total costs of turnover to be from 25% to 200% of the employee's annual pay and benefits. Should you wish to by-pass the completion of this itemized chart and instead make a conservative estimate of turnover's direct costs, we recommend you do the following:
1. Review the itemized list and note those items which are most costly for replacing employees in the targeted job for your organization.
2. Choose a cost estimate for the total direct costs for the targeted position.
3. Insert the Estimated Total Direct Turnover Cost on line 5 and click each Calc button and view your total.
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