Losing an employee costs between 50% and 200% of their annual salary. That range exists because most organisations only count the recruiting fee — and miss everything else.
The five cost components
1. Separation costs (~4% of salary) Exit interviews, HR processing, final payroll, unemployment insurance increase.
2. Vacancy costs (daily rate × days to fill) Work either doesn't get done (lost output) or gets redistributed to teammates (hidden productivity tax). Average time to fill: 42 days across all roles; 84 days for senior/specialised roles.
3. Recruiting costs (~15% of salary) Agency fees run 15–25% for professional roles. In-house recruiting time averages 80–100 hours per hire when you include sourcing, screening, interviews, and offers.
4. Onboarding costs (~12% of salary) Formal training, documentation, manager time, IT setup, compliance training.
5. Ramp-to-productivity (~25% of salary) A new hire typically reaches 80% productivity at 3–6 months. The gap between 100% and 80% productivity over that period is a real cost on your P&L.
Total: ~56–60% of annual salary for a mid-level role For senior roles (director and above), multiply by 1.5–2×.
Use the employee turnover cost calculator to model what each departure actually costs your business.