![]() ![]() We now have reliable estimates of the cost to replace every employee who has exited. The exit of a top-performing software engineer will cost about 130% of annual salary. Every time a top performer replaces an average performer (statistically very likely), we lose that other 300% of work output.įor top performers, we will recognize an additional productivity loss cost component. Studies have shown than a top performer does 400% of the work of an average employee. The impact of losing a top performer is far more significant than losing an average employee. The final component of calculating replacement cost is employee performance. It’s just a matter of getting this data from these systems. We also track how much we spend on training and relocation. We know the interview and on boarding effort for every position we recruit. The good news is that most of this information is already in our applicant tracking and HCM systems. Recruiting and on boarding a factory worker is a much different process from recruiting a business analyst. ![]() To more accurately estimate replacement cost, we will define a set of these factors for each job type in the organization. As you probably guessed, these components vary substantially across job functions and industry. ![]()
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