Turnover Cost Calculator

Formula

To calculate the Turnover Cost ($TOC$):

\[ TOC = \frac{AS}{52} \times E \times W \]

Where:

$TOC$ is the Turnover Cost ($)
$AS$ is the Average Annual Salary ($)
$E$ is the Number of Employees Lost per Year
$W$ is the Average Weeks to Fill the Position

What is Turnover Cost?

Turnover cost refers to the total expense associated with replacing an employee who leaves the company. This includes costs related to hiring, training, and productivity loss during the transition period. Calculating turnover cost helps organizations understand the financial impact of employee turnover and develop strategies to retain talent and reduce turnover rates.

Example Calculation 1

Let's assume the following values:

Average Annual Salary ($AS$) = $50,000
Employees Lost per Year ($E$) = 5
Average Weeks to Fill Position ($W$) = 4

Using the formula:

\[ TOC = \frac{50000}{52} \times 5 \times 4 \approx 19230.77 \]

The Turnover Cost (TOC) is $19,230.77.

Example Calculation 2

Let's assume the following values:

Average Annual Salary ($AS$) = $60,000
Employees Lost per Year ($E$) = 3
Average Weeks to Fill Position ($W$) = 6

Using the formula:

\[ TOC = \frac{60000}{52} \times 3 \times 6 \approx 20769.23 \]

The Turnover Cost (TOC) is $20,769.23.