How much does it cost to replace an employee?

Short answer: far more than the recruiter’s invoice. The most-cited research puts the cost of replacing an employee at roughly one-half to two times their annual salary (Gallup), and a peer-reviewed meta-analysis from the Center for American Progress found a median of about 21% of salary for most roles, climbing to ~16% for the lowest-paid and up to ~213% for senior and executive positions. Here’s where that money actually goes — and how to estimate it for a specific person.

The quick estimate

Pick a multiplier by seniority and multiply by salary:

• Entry / frontline: ~0.3–0.5× salary
• Mid-level / professional: ~0.5–1.5× salary
• Senior / specialised / leadership: ~1.5–2×+ salary

So a £40k mid-level hire costs roughly £20k–£60k to replace; a £90k specialist, well over £100k. Use a range, not a point estimate — it’s both more honest and more persuasive.

Where the cost comes from

The Center for American Progress splits it into direct and indirect costs:

• Direct: separation and any severance, temporary cover, advertising and search, screening and interviewing, onboarding and training.
• Indirect: the empty-seat productivity gap, the team’s lost output while they cover, lost institutional knowledge, and damaged client or colleague relationships.

Built In, citing SHRM, estimates roughly two-thirds of the total is intangible — knowledge and productivity, not fees. That’s the part most calculators ignore, and it’s the bigger half.

The hidden cost: ramp time

A replacement isn’t at full speed for a while. Benchmarks (via Gallup-sourced data) put time-to-full-productivity at roughly 6 to 12 months, running at an estimated 25–50% output during the ramp. For a year, you’re effectively paying a full salary for partial work — on top of everything above.

Why it matters

Most teams treat losing someone as free and keeping them as a cost. The numbers say the opposite: the replacement bill usually dwarfs the cost of a raise or a retention conversation. If you’re making that case for someone specific, the rest of our series covers how to present the cost, how to frame it, and how to structure the whole pitch.