The actual cost of replacing one employee

I want to share a real-life example from one of my clients about what it really costs to replace one employee.

Background.

One of the sales guys was planning a move to another city and said he will be leaving in 2 months. 

We were lucky to hire a new person after a month and had a 1-month overlap where the old person was teaching the new person how to do the work.

3 months later we calculated the costs associated with the change that the company incurred. 

Below you see the exact numbers.

Actual employee replacement cost

Conclusions.
Replacing employees is costly. Depending on the role the consequences can be really huge. 
In this case, we have registered:

  • a 27% reduction in productivity for the leaving employee while remaining in his position
  • a 36% loss of sales volume during the first 3 months of transition
  • a total loss of 4 times the employee’s yearly salary

Solution.
With the same client, we integrated a new software for managing employee lifecycle and were able to reduce these costs more than 10 times.
DM me or put “demo” in the comments if you want a demo.

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