The Real Cost of Employee Turnover (And How to Calculate It)

Turnover isn’t just an HR headache — it’s a business problem that eats away at profit, culture, and performance. Yet many organisations underestimate the real cost of losing people.

When HR leaders can clearly show the financial and cultural impact of turnover, it’s much easier to get executive buy-in for stronger people strategies. Let’s break it down.

Why Turnover Hurts More Than You Think

When an employee leaves, the cost isn’t just their salary. It includes:

• Recruitment costs: advertising, recruiter fees, HR team hours.
• Onboarding and training: time managers and peers spend bringing the new hire up to speed.
• Lost productivity: a new hire typically takes 6–12 months to reach full performance.
• Team disruption: morale, culture, and client relationships can all take a hit.
• Knowledge loss: when experienced employees walk, they take institutional know-how with them.

Research puts the cost of replacing an employee anywhere from 50% to 200% of their annual salary depending on the role. For mid-sized businesses, that quickly runs into hundreds of thousands — if not millions — each year.

How to Calculate Your Turnover Cost

The simplest formula:

Turnover Cost = (Recruitment + Onboarding + Lost Productivity + Other Costs) × Number of Leavers

To make this practical, we built a free Turnover Cost Calculator that helps HR leaders put a number to the problem in minutes.

👉 Try it with your own data — the results are often eye-opening for executives.

The Business Case for Action

Knowing the cost is one thing. The real question is: how do you stop the bleeding?

Our work with clients shows that tackling turnover is rarely about “one big initiative.” It’s about aligning three areas:

1. Attraction: Hiring people who are a genuine fit for your culture and EVP.
2. Engagement: Creating the conditions where people actually want to stay.
3. Retention: Systematically removing the “push factors” (burnout, poor leadership, lack of development).

This is what we call Workforce Success™ — the sweet spot where attraction, engagement, and retention work together to drive results.

Quick Wins to Reduce Turnover

If you’re under pressure now, here are three proven tactics:

• Exit data review: Don’t just collect exit surveys — look for patterns and root causes.
• Manager capability: Invest in leaders. Poor management is the #1 reason people leave.
• Career clarity: Show employees their next step. Retention improves when people see a future with you.

What Next?

Turnover is expensive — but it’s also fixable. The first step is putting a dollar figure on the problem. From there, you can make a clear business case for change.

👉 Use our Turnover Cost Calculator to uncover the true impact in your organisation or watch our free training which explores how to approach this.

And if you’re ready to go deeper, book a 5D People Strategy Session with Exsona. In 20 minutes, we’ll show you how to shift from reactive HR firefighting to proactive workforce success.