What Turnover Actually Costs a 60-Person Company

Key Takeaways

• Replacement cost typically runs from roughly half to two times annual salary, depending on role complexity.
• The largest costs are invisible: ramp time, team drag, and lost institutional knowledge.
• You don't need a perfect model. You need a defensible one your CFO can follow.

Most HR leaders sense that turnover is expensive. Far fewer can put a number on it in a budget meeting — which is exactly when the number matters.

The Five Cost Buckets

1. Direct Replacement Cost

Job ads, agency or referral fees, background checks, and the hours your team spends screening and interviewing. This is the only bucket most companies track.

2. Vacancy Drag

The work doesn't pause. It redistributes to teammates who are already at capacity — which is how one departure quietly seeds the next. This is the mechanism behind top performers disengaging first.

3. Ramp Time

A new hire typically reaches full productivity somewhere between three and nine months in. The gap between salary paid and value delivered is a real cost, and for complex roles it's the largest single bucket.

4. Manager Time

Interviewing, onboarding, and coaching pull a manager away from their own work for weeks. Price it at their loaded hourly rate and the total surprises people.

5. Institutional Knowledge

The undocumented client history, the reason a process exists, the relationship that keeps a vendor responsive. Hardest to quantify, most expensive to lose.

A Simple Model You Can Defend

For a 60-person company with average salary of $70,000 and 15% annual voluntary turnover, you're replacing about nine people a year. At a conservative 75% of salary in total replacement cost, that's roughly $470,000 annually — real money at that company size, and most of it never appears as a line item.

Now compare that to the cost of a proactive wellbeing program. Preventing even two regrettable departures a year usually covers the entire investment. That's the framing your finance team responds to — walk through it in how to justify your wellness budget to the CFO.

Where Wellbeing Changes the Math

Turnover driven by burnout, poor manager relationships, or unaddressed stress is the most preventable kind. It's also the kind that gives you the earliest warning signals — if you're watching for them. See the signs of workplace burnout and the retention business case.

Frequently Asked Questions

Should we count all turnover or only regrettable turnover?

Model both, and lead with regrettable turnover. Losing a poor fit has real cost but some upside; losing someone you wanted to keep is pure loss.

What turnover rate is normal for an SMB?

It varies widely by industry, so benchmark against your own trend rather than a national average. Direction over twelve months tells you more than any external figure.

How do we attribute retention gains to a wellness program?

Track regrettable turnover before and after, segment by team, and pair it with participation and engagement data. It's directional evidence, not a lab experiment — and directional is enough for a budget decision.