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Webinar tip · 22 October 2026
Staff turnover could be costing you £40m a year
Put a number on regrettable turnover. Even at the low estimate of half a salary per leaver, a 10,000-person firm losing 20% a year spends £40m.
Alex CassAon
Most boards know staff turnover is a problem. Few know what it costs. In our webinar with Aon, Alex Cass showed how quickly the number becomes impossible to ignore.
Do the sum
Research puts the cost of replacing someone at anywhere from 50% to 150% of their annual salary, once you count recruitment, onboarding, lost productivity and the time it takes a new starter to get up to speed. Cass's worked example uses the low end:
- 10,000 employees on an average salary of £40,000
- a 20% regrettable turnover rate: 2,000 people a year you wanted to keep
- 50% of salary to replace each one: £20,000
That is £40 million a year. Cut regrettable turnover by a single percentage point and you save £2 million.
What to do this week
- Work out your own regrettable turnover rate, separate from total turnover.
- Multiply leavers by half the average salary: a deliberately cautious figure the finance team will accept.
- Take that number to the conversation about retention budgets.
Estimates of replacement cost vary widely, and some studies put it lower. The point of the exercise is to make a hidden cost visible, using a figure you can defend.
Read the clip transcript
The various bits of research estimate that cost is anywhere between 50 to 150% of the position's annual salary, although some estimate even higher. So what we're going to do is we're going to look at an organization with a head count of 10,000. So that's kind of a large, sort of mid to large size organization in the UK. And we can assume that the average salary is around 40,000 a year. So in this scenario, because I like round numbers, we'll assume the regrettable turnover rate is 20%. Right. That organization is losing 2,000 employees that it wants to keep every year. That is a huge figure, isn't it? 40 million pounds a year. That's based on that kind of low assumption of 50%. So if you actually think about taking some actions to reduce that regrettable turnover, and you've just managed to reduce the turnover rate by 1%, so take it down to 19%, you've saved 2 million in hidden costs every year.
From the webinar · Jun 2023
Retention is the new Recruitment
Watch the full hour free, on demand.
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