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Cost of employee turnover
calculator

Work out what staff turnover is really costing your business, and how much of it you could have prevented.

Your numbers

The Australian average is 16% (AHRI)
Estimated annual cost
 
Share
How is the cost of employee turnover calculated?

Add four costs for each departure: separation (admin and exit processing), vacancy (lost output while the role is open), replacement (recruiting and hiring the next person), and ramp-up (training and reduced productivity before they are fully effective). Multiply the cost per departure by the number of people who leave in a year. A common shortcut is to use 1.5 times annual salary as the total replacement cost.

How we calculated this

We take your headcount and turnover rate to get the number of people who leave in a year, then price each departure at 1.5 times average salary, the mid-point of the published replacement-cost range. Multiplying the two gives the annual cost. We then show the share the research says employers could have prevented, and what a five-point drop in the rate would keep in the business. The working, the assumptions and the sources are below.

New to the term? Read the plain-English definition of employee turnover in the HR Glossary.

Your working
Assumptions
  • Every departure is costed at 1.5 times salary: the mid-point of Gallup's one-half to two times range and the multiplier used in Australian advisory practice. Frontline roles sit nearer the bottom of that range and senior roles above the top, so a mixed workforce lands near the middle.
  • Turnover rate is applied to total headcount, so it counts voluntary and involuntary exits alike. If you enter a resignation-only rate, the preventable share is understated.
  • The preventable share is 63%, from Work Institute's 2025 Retention Report, which classifies exits by the reason employees themselves gave. Pay is not in that share; career, manager, wellbeing and job-fit reasons are.
  • Salary is average base salary. Using total remuneration raises the number; ignoring the on-costs and management time of replacing someone lowers it. The two roughly cancel, which is why the mid-point multiplier holds.
Sources

What to do about it

The number above is an annual bill nobody signs off. These steps turn it into a line someone owns, whether that is you or the person you report to.

1

Put the annual figure on the same page as the recruitment budget

Most organisations budget for hiring and treat turnover as weather. Side by side, the cost of leaving usually dwarfs the cost of hiring, and that comparison is what gets a retention conversation funded.

2

Split departures by reason, manager and tenure before you go looking for fixes

The 63% preventable share is an average. Yours might be higher in one team and near zero elsewhere. Exits inside the first year point at hiring and onboarding; exits at two to four years point at career and manager.

3
Where a tool helps

Fix the front door first

The most expensive departures are the ones that were never going to work: hires that looked right on paper and did not fit the team. Measure fit alongside skills before the offer, and the first-year exits fall fastest.

4

Ask the people who stayed what would make them leave

Exit interviews arrive too late and are polite. Short regular pulses on how the work actually feels, read by team and manager, show the drift months before the resignation.

5

Set a five-point target and re-run this every quarter

The what-if line above prices a five-point drop. Make that the goal, name the teams it comes from, and put the recovered figure in front of whoever owns the budget when it lands.

Most turnover is decided
before day one.

Compono Hire is an applicant tracking system (ATS) that measures fit before you make the offer. It runs the process every ATS runs (postings, pipeline, interviews, offers) and adds the people insight most ATSs skip: a validated work personality and culture fit read on every candidate, scored the same way every time and shown next to the skills screen.

That is step 3 done inside the hiring process, where the most expensive departures are decided. The bill above is mostly people who should not have been hired for that team, or who were hired right and then drifted; the first is what Hire prevents, and Compono Engage watches the second.

See how it works
Compono Hire
400+
stores on one standard process

Common questions

What is the average cost of employee turnover in Australia?

Australian advisory research puts the true all-in cost at roughly 1.5 times the employee's annual salary once lost productivity and ramp-up are counted (Bentleys Australia). The average annual turnover rate in Australia is about 16%.

How much employee turnover is preventable?

The Work Institute's 2025 Retention Report attributes about 63% of turnover to factors the employer can influence, such as management, career growth, and culture fit, rather than pay or relocation.

What is a good employee turnover rate?

It depends on the industry. The Australian average sits near 16%. Smaller organisations tend to run lower (around 11%) and larger ones higher (around 21%). Construction and hospitality run hotter than average.

This page is general information, not legal advice. We check figures annually and update them on a best-efforts basis, but employment rules change and we cannot promise everything here is current or complete. Before you act on it, confirm the detail with the relevant authority in your country or your own adviser. Last reviewed July 2026.

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Employee turnover

The plain-English definition, with the calculators and rules that sit around it.

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