**Turnover**is the percent of your staff that quits or is let go every year.**Ramp up**is the time it takes for a new hire to become productive.

To find your turnover and ramp up cost, 3 numbers matter: the *average annual salary*, the number of *employees you replace*, and the number of *additional new hires*.

We’ll also need to make two educated guesses: The *replacement cost* for each lost employees, and the *ramp up cost* for each new one.

Let’s look at an example: a 50-person organization with 16% annual turnover adding 10 people over the next year with a $70,000 average annual salary.

Let’s assume a replacement cost of 9 months’ salary, or **75% of base**. At 16% annual turnover the organization can expect to lose about 9 employees over the next year. At a **cost/hire of $52,500**, turnover costs **$472,500 annually**.

Cutting turnover by 25% would **save $118,125.**

Let’s assume an average cost to productivity of **50% wasted time** over 6 months. Adding in 9 replacement heads, a total of 19 new employees will join in the next year. With 4 weeks paid vacation, the average salary is $1,458/week. That’s a **cost/hire of $17,500**, or **$332,500 annually** for 19 new hires.

Cutting ramp up time by 25% would **save $83,125.**

That’s a **28.75% increase** in the salary budget of $700,000, enough for **2 additional hires**.

*Society for Human Resource Management*, Apr. 16, 2015

*Center for American Progress*, Nov. 16, 2012

*Gallup*, Feb. 22, 2017

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