Turnover Cost Model
Senzo’s Turnover Cost Model estimates the full financial cost of a single employee departure by role category. It uses a five-component formula based on published Canadian healthcare benchmarks and collective agreement data.
Cost estimates use Canadian benchmark parameters by default. If your organization has access to actual compensation and fill-time data, entering custom figures will produce more precise outputs. See Cost Analytics for how to override benchmarks. C_event = C_sep + C_vac + C_acq + C_onboard + C_prod
| Component | Name | What it captures |
|---|
| C_sep | Separation Cost | Administrative and HR costs associated with the departure |
| C_vac | Vacancy Coverage Cost | Premium cost of covering clinical load during the unfilled period |
| C_acq | Acquisition Cost | All costs to find and secure a replacement |
| C_onboard | Onboarding Cost | Cost to integrate the replacement to functional independence |
| C_prod | Productivity Ramp Cost | Value of lost productivity before the replacement reaches full output |
Component definitions
C_sep — Separation Cost
C_sep = (exit_admin_hours × avg_manager_hourly_rate) + severance_applicable
C_vac — Vacancy Coverage Cost
C_vac = (backfill_daily_rate − base_daily_rate) × avg_vacancy_days
C_acq — Acquisition Cost
C_acq = search_fee + advertising + interview_time_cost + signing_bonus + relocation
C_onboard — Onboarding Cost
C_onboard = (orientation_hours × trainer_rate) + (salary × orientation_fraction) + credentialing_lag_cost
C_prod — Productivity Ramp Cost
C_prod = annual_compensation × ramp_period_years × (1 − avg_productivity_during_ramp)
C_prod is an opportunity cost — it represents foregone clinical value during the productivity ramp period, not a direct cash outlay. It is displayed separately from the cash components in Senzo’s Cost Analytics to ensure correct interpretation.
Scenarios
Each role produces three cost estimates:
| Scenario | Logic |
|---|
| Conservative | Lower-bound vacancy days, lower backfill premium, no signing bonus or relocation, productivity ramp at upper bound (75%) |
| Moderate | Geometric mean of parameter bounds, signing bonus included at benchmark, ramp at midpoint |
| High | Upper-bound vacancy days, upper-bound backfill premium, signing bonus and relocation included, productivity ramp at lower bound (50%) |
Canadian role benchmarks
| Role | Annual Comp | Vacancy Days (mod) | Search Fee | Ramp Period |
|---|
| Registered Nurse | $85,000 | 90 days | None | 3 months |
| Licensed Practical Nurse | $62,000 | 60 days | None | 2 months |
| General Practitioner | $280,000 | 270 days | 15–20% | 6 months |
| Specialist (mid-complexity) | $380,000 | 365 days | 15–20% | 12 months |
| Specialist (high-complexity) | $520,000 | 548 days | 15–25% | 18 months |
| Allied Health | $72,000 | 60 days | None | 4 months |
| Health Care Aide | $48,000 | 30 days | None | 2 months |
Annualized cost
Senzo multiplies per-event cost by the number of observed departures in the last 12 months (pulled from your workforce_metrics data) to produce an annualized turnover cost estimate by role.
Retention break-even
The retention break-even threshold answers: how much could we invest in retention before it stops being cost-effective?
Break-even = annualized_cost × 0.10
Methodological flags
These limitations should be considered when presenting cost outputs to governance audiences:
- Compensation figures are benchmarks, not actuals — enter your own data for precision
- Vacancy days are scenario ranges reflecting fill-time uncertainty, not point estimates
- C_prod is opportunity cost, not a budget outlay
- The model does not disaggregate voluntary from involuntary turnover in its base form
- Rural and remote locum premiums can be 2–3× urban rates — not reflected in base model
See also
