Worked example: losing a $70K specialist
Eight weeks vacant at 75% coverage costs about $8,077 in lost output. Recruiting runs $6,000. The replacement ramps over 16 weeks at half productivity — another $8,615. One exit: $22,692, about 32% of salary. If 15% of a 40-person team quits annually at this level, turnover quietly consumes $136,000 a year — a full headcount or two.
- • Sales roles cost the most: vacancy is directly lost revenue, and ramp runs 6–9 months.
- • Exit-interview themes beat engagement-survey averages for finding the fix.
- • Counter-offers retain only ~50% of people past 12 months — fix causes, not symptoms.
FAQ
What does it cost to replace an employee?
Common research benchmarks run 50–200% of annual salary depending on seniority and specialization. Hourly high-volume roles sit at the low end; technical and leadership roles exceed 150% once vacancy and ramp are priced honestly.
What are the hidden costs of turnover?
Vacancy drag on the covering team, lost institutional knowledge, manager time in interviews, customer-relationship disruption, and the new hire's months at partial productivity. Recruiting fees are usually under a quarter of the true total.
What is a healthy turnover rate?
Roughly 10–15% annually is normal across US industries. Below 5% can signal stagnation; above 20% in professional roles is expensive. Compare within your industry — hospitality norms differ wildly from engineering.
How do you reduce turnover cost?
Hire slower (bad fits churn fastest), price pay to market annually, fix manager quality (the top cited quit reason), build real onboarding to shorten ramp, and run stay interviews before exit interviews.
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Written by Sam Doshi and the RevenueLab editorial team. We don't sell the data feeds this tool is built on.
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