Backfill cost measures what it takes to replace a departing employee. It includes direct spending plus the productivity and learning time needed before the replacement contributes fully. section 8.1
Use this rule of thumb to identify the main cost categories:
- Backfill cost = hiring cost + onboarding and training + learning and skill development + unfilled time and other expenses. section 8.1
- Include recruiting work, job advertisements, training, ramp-up time, and the workload absorbed while the role remains open. section 8.1 section 8.3.3
- Treat lost institutional knowledge and productivity as additional intangible costs rather than assuming the invoice total captures everything. section 8.3.3
A $30,000 replacement
A replacement scenario totals $5,400 for hiring, $21,600 for onboarding and ramp-up, and $3,000 for miscellaneous expenses, producing a $30,000 backfill cost. Retaining the existing employee would cost an estimated $10,000, or one-third as much, before considering the knowledge and productivity lost through departure. section 8.3.3
