> ## Documentation Index
> Fetch the complete documentation index at: https://docs.senzohq.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Turnover Cost Model

> How Senzo calculates the true cost of workforce turnover by role and scenario

# 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.

<Note>
  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](/features/cost-analytics) for how to override benchmarks.
</Note>

## The formula

```
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
```

Covers: HR exit processing time, manager time, any applicable severance. Default assumption: 8 hours of combined HR/manager time at \$75/hr.

Severance applies to involuntary departures only. The base model does not disaggregate voluntary from involuntary turnover.

### C\_vac — Vacancy Coverage Cost

```
C_vac = (backfill_daily_rate − base_daily_rate) × avg_vacancy_days
```

Covers: the premium cost of agency or overtime backfill during the unfilled period. The number of vacancy days varies significantly by role — specialist physicians average 270–548 days to fill; health care aides average 14–60 days.

### C\_acq — Acquisition Cost

```
C_acq = search_fee + advertising + interview_time_cost + signing_bonus + relocation
```

Covers: recruitment agency fees (15–25% of first-year compensation for physicians), job advertising, interview panel time (typically 20 hours at \$75/hr), signing bonuses, and relocation allowances where applicable.

### C\_onboard — Onboarding Cost

```
C_onboard = (orientation_hours × trainer_rate) + (salary × orientation_fraction) + credentialing_lag_cost
```

Covers: structured orientation period (default 4 weeks), credentialing/privileging lag for regulated roles. Physicians in Manitoba typically require 28–84 days from hire to independent practice due to credentialing.

### C\_prod — Productivity Ramp Cost

```
C_prod = annual_compensation × ramp_period_years × (1 − avg_productivity_during_ramp)
```

<Warning>
  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.
</Warning>

## 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    |

Compensation anchors are drawn from MNU and MGEU collective agreements and CIHI benchmark data. They are estimates — actual costs will vary by organization and region.

## 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
```

Any retention program that costs less than this figure — and achieves at least a 10% reduction in departures — is financially justified.

## Methodological flags

These limitations should be considered when presenting cost outputs to governance audiences:

1. Compensation figures are benchmarks, not actuals — enter your own data for precision
2. Vacancy days are scenario ranges reflecting fill-time uncertainty, not point estimates
3. C\_prod is opportunity cost, not a budget outlay
4. The model does not disaggregate voluntary from involuntary turnover in its base form
5. Rural and remote locum premiums can be 2–3× urban rates — not reflected in base model

## See also

* [Cost Analytics](/features/cost-analytics) — the full Turnover Cost tab in the platform
* [How metrics are calculated](/core-concepts/how-metrics-are-calculated) — all metric definitions