Absence Rates Recruitment Cost Formula
Learn how annual absence days, absent capacity, recruitment cost and cover cost are estimated.
This calculation translates an annual absence rate into lost work days and an average full-time-equivalent capacity gap. It then estimates the recruitment and daily cover costs associated with maintaining that capacity.
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Estimated Annual Recruitment Cost
Where:
First convert absence into an average number of full-time-equivalent employees absent across the year, then multiply that capacity gap by the estimated cost of one hire.
Variables Explained
| Variable | What It Means | Unit |
|---|---|---|
| employeeCount - Average number of employees | Average workforce headcount during the year. | number |
| workingDaysPerYear - Scheduled working days per employee | Scheduled working days for one employee before absence is applied. | days |
| annualAbsenceRate - Annual absence rate | Percentage of scheduled work time lost to absence. | percent |
| annualAbsenceDays - Annual absence days | Estimated scheduled work days lost to absence across the workforce. | days |
| absenceFte - Average absent capacity | Absence days converted to an average full-time-equivalent capacity gap. | number |
| recruitmentCostPerHire - Recruitment cost per hire | Estimated cost of recruiting one replacement hire. | currency |
| dailyCoverCost - Daily temporary cover cost | Estimated cover cost for one absence day. | currency |
Step-by-Step Calculation
Calculate scheduled workforce days
Multiply average headcount by scheduled days per employee.
totalScheduledWorkDays = employeeCount * workingDaysPerYear
Estimate annual absence days
Apply the absence percentage to all scheduled workforce days.
annualAbsenceDays = totalScheduledWorkDays * (annualAbsenceRate / 100)
Convert absence to FTE capacity
Divide lost days by one employee's annual scheduled days.
absenceFte = annualAbsenceDays / workingDaysPerYear
Estimate recruitment cost
Value the average absent capacity using the recruitment cost per hire.
annualRecruitmentCost = absenceFte * recruitmentCostPerHire
Estimate cover cost
Multiply every estimated absence day by the daily cover cost.
annualCoverCost = annualAbsenceDays * dailyCoverCost
Combine staffing costs
Add the recruitment and temporary-cover estimates.
totalAbsenceStaffingCost = annualRecruitmentCost + annualCoverCost
Example: 100 employees with a 4% absence rate
Scheduled workforce days
100 * 260
26,000 days
Annual absence days
26,000 * (4 / 100)
1,040 days
Average absent capacity
1,040 / 260
4.00 FTE
Annual recruitment cost
4.00 * $5,000
$20,000
Annual cover cost
1,040 * $200
$208,000
Total absence staffing cost
$20,000 + $208,000
$228,000
Final Result
Estimated annual recruitment cost: $20,000. Estimated annual cover cost: $208,000. Combined absence staffing cost: $228,000.
Assumptions
- ✓The absence rate is applied evenly across all scheduled employee work days.
- ✓The recruitment cost per hire represents the cost of replacing one FTE of capacity.
- ✓Temporary cover is assumed for every absence day at the daily cost entered.
- ✓The calculation is an annual planning estimate rather than a prediction of individual absences.
Limitations
- !Actual absence can be concentrated in specific teams or periods, creating a different operational impact.
- !Not every absence day requires paid cover because work may be deferred or redistributed.
- !The estimate excludes payroll during absence, benefits, lost output, quality effects and management time.
- !A recruitment cost per hire may not reflect short-term, specialist or part-time replacement arrangements.
Common Mistakes to Avoid
Entering 0.04 instead of 4 for a 4% absence rate.
Using calendar days rather than scheduled working days per employee.
Treating the FTE result as the number of people absent at one time.
Including salary costs in both daily cover cost and recruitment cost without checking for overlap.
Assuming all roles have the same absence rate and replacement cost.
Related Formulas
Frequently Asked Questions
How do you calculate absence FTE?
Divide total annual absence days by scheduled working days per employee. This expresses the annual lost days as average full-time-equivalent capacity.
Why does working days per year cancel out of the recruitment formula?
When the same working-days figure is used to calculate absence days and convert those days to FTE, the resulting absence FTE equals headcount multiplied by the absence rate.
Is the recruitment cost result the same as annual cover cost?
No. Recruitment cost values the average capacity gap using cost per hire. Cover cost values each absence day using the daily cover cost.
Can annual recruitment cost be zero?
Yes. It is zero if the absence rate is zero, headcount is zero in a theoretical calculation, or recruitment cost per hire is entered as zero.
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