What Is Turnover Really Costing You?
Put in your own numbers and see the cost in seconds. Then get a research-backed report on what it is worth to keep your best people.
Your team
Free report: your ROI projection, three scenarios, the research behind it, and a PDF you can share.
What better leadership is worth to you
Three forces change this number: keeping the people you have, getting more from every hour worked, and raising the performance of your people.
| Scenario | Total impact | Investment | Net gain | Return |
|---|
How the model works: retention = people kept × your replacement cost. Productivity = payroll × improvement. Performance = share of people elevated × pay × performance lift. Investment is a typical annual leadership development budget for an organization your size. These are estimates informed by published research. Your results depend on your organization and on follow-through.
Three levers that move your number
Each one is backed by published research, and each one is work we do with clients every week.
Train your leaders
- Leadership training improves on-the-job leadership behavior by 28%, job performance by 20% and organizational results by 25%.Lacerenza et al., Journal of Applied Psychology, 2017 (meta-analysis of 335 studies)
- Managers account for at least 70% of the variance in team engagement, yet only 44% of managers say they have received formal training.Gallup, State of the Global Workplace, 2025
- Teams led by managers trained in coaching show up to 18% higher engagement.Gallup, 2025
- 94% of employees say they would stay longer at a company that invested in their learning.LinkedIn Workplace Learning Report
Hire with pre-hire assessments
- Structured interviews are the strongest single predictor of job performance (validity .42), followed by job knowledge tests (.40), biodata (.38), work samples (.33) and cognitive ability (.31).Sackett, Zhang, Berry & Lievens, Journal of Applied Psychology, 2022
- Structured, validated methods consistently beat gut-feel interviewing, and combining them predicts better than any one alone.Sackett et al., 2022
- Replacing a wrong hire costs one-half to two times that person's annual salary.Gallup
Measure engagement
- Teams in the top quarter for engagement have 21% lower turnover in high-turnover organizations and 51% lower in low-turnover organizations.Gallup Q12 Meta-Analysis, 2024 (183,806 business units, 3.3 million employees)
- The same teams show 23% higher profitability, 18% higher sales productivity and 78% less absenteeism.Gallup Q12 Meta-Analysis, 2024
- Only 21% of employees worldwide are engaged. Lost productivity from the 2024 decline: $438 billion.Gallup, State of the Global Workplace, 2025
Turnover is a leadership problem. Leadership can be taught.
People rarely leave companies. They leave the way they are led. When supervisors and managers learn to select well, coach well and listen well, people stay.
Environmental services turnover over three years. Nursing turnover fell from 42% to 10% over the same work, and every department reduced turnover.
Turnover across the plant. Weekly output rose from 300,000 to 480,000 gallons and waste dropped 70%.
Three levers that lower turnover
Your free report shows the research behind each one and what it is worth on your numbers.
Train your leaders
- Managers account for at least 70% of the variance in team engagement, yet only 44% say they have received formal training.Gallup, State of the Global Workplace, 2025
Hire with pre-hire assessments
- Structured, validated selection methods are the strongest predictors of job performance.Sackett et al., Journal of Applied Psychology, 2022
Measure engagement
- Top-quarter teams for engagement have 21% to 51% lower turnover and 23% higher profitability.Gallup Q12 Meta-Analysis, 2024
Employee turnover cost, answered
How do you calculate the cost of employee turnover?
Multiply the number of people who leave in a year by what it costs to replace one of them. In this calculator that is: employees × annual turnover rate × average pay × replacement cost as a percent of pay. A 120-person company with 24% turnover, $55,000 average pay and a 50% replacement cost loses about $792,000 a year.
How much does it cost to replace one employee?
Gallup estimates one-half to two times the employee's annual salary once you count recruiting, onboarding, training time and lost productivity. The Work Institute uses a conservative 33% of base pay. Frontline roles tend to sit at the low end and managers and specialists at the high end.
What is a normal turnover rate?
The U.S. Bureau of Labor Statistics reported that in 2025 an average of 2.0% of employees quit each month and 3.3% separated for any reason. That works out to roughly 24% a year in voluntary quits and about 40% in total separations. Rates vary widely by industry, so compare yourself with your own sector.
What actually reduces turnover?
Three things show up again and again in the research: leaders who are trained to coach and communicate, a selection process that uses structured interviews and validated assessments, and regular measurement of engagement followed by action. Jody Holland, Inc. has helped organizations in healthcare, manufacturing, banking and other industries do all three.
Ready to keep your best people?
Jody Holland has trained more than 300,000 leaders in 14 countries since 1999. Bring your numbers and we will map out where to start.
Schedule a callGet your full turnover report
See what fixing turnover is worth, with the research behind it and a PDF you can share.
