What Is Cost of Turnover? | HR Glossary | BambooHR
The total financial impact of losing and replacing an employee.
The cost of turnover is the full financial impact of an employee leaving and being replaced. It bundles together direct costs — advertising, agency fees, interviewing time and onboarding — with indirect costs such as lost productivity, overburdened colleagues and the ramp-up time before a replacement is fully effective.
Because much of this cost is hidden, turnover is often more expensive than employers assume, particularly for senior or specialist roles where replacement takes longer and institutional knowledge is harder to rebuild.
Quantifying turnover cost strengthens the business case for retention investment: it shows that spending on engagement, development and fair reward can be cheaper than repeatedly replacing people. Tracking it alongside labour turnover rates focuses attention where losses hurt most.
