The formula for Estimating Turnover Cost Turnover Cost = (Separation Costs + Vacancy Costs + Replacement Costs + Training Costs) Deûning Each Component ● Separation Costs: Includes exit interviews, severance pay, and any additional HR processing costs. ● Training Costs: Considers training time, onboarding, and lost productivity as new hires ramp up. ● Vacancy Costs: Covers lost productivity and overtime for remaining employees to compensate for the vacancy. ● Replacement Costs: Involves recruiting, interviewing, and hiring expenses, as well as signing bonuses or relocation expenses, if applicable. Quick Estimate Formula for Hourly Positions Turnover Cost = Annual Salary of Position × 0.2 to 0.3 For example, if a manufacturing worker earns $50,000 annually, the turnover cost might be around $10,000 to $15,000 per turnover event. This approach provides a general idea but can be reûned with real data from the company on recruitment, training, and lost productivity costs for accuracy.