Job Aid
Calculating Replacement Costs
Any accurate calculation of the cost of losing an employee includes both the direct costs of replacement and the indirect costs affecting clients' relationships and the work environment. The calculation is carried out in terms of actual numbers of employees within each job classification set because, for example replacement costs for a senior manager differ from those of a sales representative. Exclude actions from your calculation: cyclical layoffs, permanent reduction in force, merger terminations or resignations due to personal reasons such as: family illness, spouse relocation, returning to school full-time. Do you know what are your turnover costs?
Calculating Direct Costs
A. Job Classification:
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