Havre Job Service Employers'
Committee Employer Resource Guide
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Havre Job Service Employers'
Committee Employer Resource Guide
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Turnover Cost
Formula
High
turnover can sabotage your company's bottom line. To estimate the cost of
turnover in your firm, use the following formula. Select
a department or job function that has a lot of turnover. Use an actual number
or, lacking exact statistics, estimate the number of people who left the job or
department during the past 12 months. Write that number below on Line 4. The
average cost of turnover is 25 percent of an employee's annual salary (Line 1)'
plus the cost of the benefits (Line 2) you provide. Typical benefits amount to
about 30 percent of wages.* The total cost per employee (Line 3) is the total of
Line 1 and Line 2. . 1.Annual wage: _____x .25 = ______ 2.Annual
wage: _____x .30 =______x .25 = ________ 3.
Total turnover cost per employee (add lines 1 & 2): ________ 4.Total
# of employees who left: ______ 5.
Total cost of turnover (multiply lines 3 & 4): ______________ Here’s
an example 1.Annual
wage: $12,844 x .25= $3,211 2.Annual
wage: $12,844 x.30=3,853.20 x.25= $963.30 3.Total
turnover cost per employee: $3,211 + $963.30 = $4,174.30 4.Total
number of employees who left: 5 5.Total
cost of turn over: $4,174.30 x 5 = $20,871.50 *
Total cost of a complete benefit package on top of payroll
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