What Do Staff Absence and Turnover Really Cost?

Most finance teams can quote what they spend on hiring fees. Very few can quote what turnover and absence quietly cost across a year. The real cost is spread across several budgets. Nobody has ever added it up.

How is the cost of turnover actually calculated?

The advertised hiring fee is the smallest part of it. The full cost has several pieces. There’s the weeks a role sits empty, and the time existing staff spend covering the gap. There’s the hours a manager spends interviewing and onboarding. And there’s the months a new hire takes to reach the output of the person who left. Add it all up. You land close to Gallup’s own estimate: half to two times the departing employee’s annual salary.

Key figures

• Losing one employee typically costs half to two times their annual salary. That is Gallup’s own estimate (“This Fixable Problem Costs U.S. Businesses $1 Trillion,” 2019).
• Highly engaged teams show 78% less absenteeism than the least engaged. In low-turnover organisations, they also show 51% less turnover (Gallup, Q12 Meta-Analysis, 11th edition, 2024).
• Highly engaged teams are 23% more profitable than disengaged ones (Gallup, Q12 Meta-Analysis, 11th edition, 2024).
• In the UK, the average worker took 9.4 sick days in 2025. That is the highest figure since CIPD began tracking it in 2010 (CIPD, Health and Wellbeing at Work, 2025, UK figure).
• A toxic culture is a far better sign of who leaves than pay is. It’s 10.4 times stronger (MIT Sloan Management Review, 2022).

Why absence costs more than the sick day itself

The day someone takes off is rarely the whole cost. There’s the work that piles up before it, and the rushed handover. There are colleagues who quietly absorb the gap. And there’s the day or two after, when someone’s back but still not fully there.

That second kind of cost is called presenteeism: being present but not really working. It’s harder to see than a day marked absent. Across a team, it can cost as much as the absence itself.

What’s actually driving it?

The Gallup figures above point at the same thing from two directions. Engaged teams don’t just feel better. They leave less and take fewer days off, by a wide margin.

Engagement is shaped heavily by the immediate manager. That includes how clear the expectations are. It also includes whether someone has control over their work, and whether anyone notices when they’re struggling. We cover that link between leadership and burnout in a separate piece.

What to do about it

Start by working out what turnover and absence are actually costing your organisation. Use the data you already hold, rather than an industry average.

Once you can see it clearly, trace it back to where it’s actually coming from. That might be one team, one manager, or one badly designed process. It beats rolling out a wellbeing perk that never touches the cause. And the fix has to work both sides. The organisation sets the conditions. The people inside it need the knowledge to stay well under them.

Whatever you fix needs to become part of how the organisation runs day to day. It can’t be a one-off that fades by next quarter. That’s Identify, Action, Embed in practice: see where it’s coming from, fix the cause, make it stick.