Calculate Your Annual Savings

How it works:

Savings = (Direct Recruitment Costs) + (Indirect Lost Productivity Costs)

Direct Costs: Number of replacement hires × Cost per hire
Indirect Costs: Salary paid to new hires during non-productive training period

This calculator is conservative skewed to lower costs meaning that PaySurge will actually save you more money than the calculator states.
There are a lot of other costs to consider:

1. Separation Costs
These are the immediate costs associated with the employee's departure.

• Exit Interview & Administrative Costs: The time spent by HR personnel and the departing employee's manager to conduct exit interviews, handle final paperwork, and deactivate access to systems. This is salaried time that could have been spent on other productive tasks.
• Severance Pay: Any contractual or customary severance paid to the departing employee.
• Accrued Paid Time Off (PTO): Payout of any unused vacation time.
• Increased Unemployment Insurance (UI) Premiums: Every claim against your UI account can potentially increase your tax rate in the future.

2. Vacancy Costs (The "Empty Seat" Costs)
This is a critical and often underestimated category. These are the costs incurred during the period the position is unfilled.

• Lost Productivity / Revenue: This is the most significant vacancy cost. The work that the employee was doing is simply not getting done, which can lead to delayed projects, missed sales opportunities, or reduced production output.
• Burden on Remaining Staff:
  • Overtime Pay: You may have to pay other employees overtime to cover the vacant role's responsibilities.
  • Employee Burnout: The remaining team members can become overworked and stressed, which lowers their morale, reduces their own productivity, and can even lead to more turnover (a costly vicious cycle).
• Manager's Time: The manager must spend time redistributing work, covering essential tasks themselves, and dealing with the consequences of the vacancy, pulling them away from their primary leadership responsibilities.

3. Deeper Recruitment & Hiring Costs
• Advertising & Sourcing: Fees for posting on job boards (like LinkedIn, Indeed), costs for sourcing tools, or fees for external recruiting agencies.
• Time Cost of Screening & Interviewing: The cumulative hours spent by HR, managers, and other team members reviewing resumes, conducting phone screens, and sitting in interviews. This is often the largest single cost in recruiting.
• Assessments & Checks: Costs for background checks, drug screenings, or skills assessments (e.g., coding tests, personality profiles).
• Signing Bonuses & Relocation Costs: Any bonuses or relocation packages offered to secure the new candidate.

4. Broader Onboarding & Training Costs
Your formula cleverly captures the new hire's salary during unproductive training. Here's what's missing:

• Trainer's Lost Productivity: The time spent by managers and peers training the new employee is time they are not spending on their own work. If a senior employee spends 5 hours a week for a month training a new hire, that's 20 hours of their own productivity lost.
• "Ramp-Up" Period Productivity Loss: An employee is not 100% productive the day after their initial training ends. The "ramp-up" period to reach full productivity can take months. During this time, you are paying a full salary for partial output. For example, they might be at 50% productivity in month one, 75% in month two, and 95% in month three. This gap is a significant cost.
• Higher Error Rate: New employees naturally make more mistakes, which can lead to wasted materials, rework, or customer service issues that have a real financial cost.

5. Intangible & Cultural Costs
These are the hardest to quantify but can have the most damaging long-term effects.

• Loss of Institutional Knowledge: The departing employee takes with them valuable knowledge about processes, clients, and internal politics that is not written down anywhere.
• Damaged Team Morale: High turnover can create an environment of instability and fear, causing remaining employees to disengage or start looking for other jobs.
• Damaged Customer Relationships: If the employee was in a client-facing role, their departure can disrupt customer satisfaction and loyalty.

By incorporating these additional concepts into your model, you can build a far more accurate and compelling picture of what employee turnover is truly costing your organization. PaySurge helps reduce turnover, saving you money on recruitment, training, and lost productivity.