Calculating The Cost of Employee Turnover

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Cost of Employee Turnover

Employee turnover costs range from 20% to 400% depending on which article or study you read. The reality is that it is very difficult to calculate the exact cost of employee turnover as it depends on many factors, such as:

  • Recruitment agency costs
  • Size of the internal recruitment team
  • Time to hire
  • Level of revenue of your business
  • The seniority of the role
  • Salary of the employee
  • The reason for leaving (dismissal/voluntary)
  • and more…

This can make the calculation complicated and time-consuming. This is why Your FLOCK took it upon itself to make your life easier and do the calculation for you without needing to have granular data about your recruitment stats.


Calculating The Cost of Employee Turnover

In our calculator, we focused on one thing that has the highest impact on the bottom line – the loss of employee productivity when losing an employee and the time it takes the new employee to reach full productivity.

Try our Employee Turnover Cost Calculator here.

To make the calculation we used fantastic research conducted by Oxford Economics. In their calculations, they included various factors that impact the bottom line. We simplified it and focused on the time and money lost due to productivity loss when re-hiring.


Calculations Explained

Time to reach full productivity of new employees

This calculator assumes that you will rehire employees that leave your business. According to research, it takes between 10 to 60 weeks for new employees to reach full productivity. It depends on your industry and the experience of the new employee. they could be from the same sector, different sectors, straight from university or unemployed.

For a new employee who worked in the same industry, it will take between 10-20 weeks to achieve full productivity. For somebody from a different sector, it will take 20-40 weeks. University graduates need about 30-50 weeks and previously unemployed – up to 60 weeks.

Taking all this into account, we can calculate how many weeks we lose in the time when new employees are getting onboarded to reach full productivity. You can see the more detailed breakdown of it below.

In our calculations, we assume that you will recruit an equal mix of people from the same and other sectors.


Time to hire

Each industry has a different time to hire which affects the productivity of the entire team. This also has an impact on your performance. Here are the average Time-to-hire statistics across various industries (source):

Retail – 5 weeks
Accounting & Legal – 7.6 weeks
IT/Tech – 8.4 weeks
Media/Advertising – 8.6 weeks
Other – 5.5 weeks



Try our Employee Turnover Cost Calculator here.

Using the calculations above, a Marketing Agency that lost 6 employees over the past year with an average salary of £25,000 and rehired half from the same and half from a different industry would lose the following due to productivity loss:

£50,469=6 X £25,000 X (8.6+7.55)/48

Employee turnover cost = Number employees who left your business last year X Their average salary X (Number of weeks to rehire new person + Number of weeks for new employees to reach full productivity) / Number of working weeks in a year

On top of that cost, we will also have recruitment fees if you use a recruitment agency and additional revenue loss if your business is revenue-making.



Your FLOCK can minimise your employee turnover by an average of 23% by helping team leaders flag people who need to most support so they can take action and make sure they stay and don’t become disengaged. We have multiple clients where we saved them £100,000s after only six months of use.

You can check our case studies here:

IMD – only 8% employee turnover and  £100,000 saved after 6 months

Talent Crowd – only 7% employee turnover and  £180,000 saved after 6 months

Digital Media Stream – 0% employee turnover and  £20,000 saved after 6 months

Preston’s College – 0% employee turnover and  £150,000 saved after 6 months


Sign up to Your FLOCK for a 6-months subscription and we guarantee improvement in employee retention. We are so confident that we provide a money-back guarantee if we don’t!

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