Human capital drain and its financial representation

    Currently I am reading an excellent book "Slack: Getting Past Burnout, Busywork, and the Myth of Total Efficiency" by Tom DeMarco and can't stand to share with you one particular topic: human capital drain.
   People leave companies because of the dozens of reasons, but everyone who quits on his/her own terms is a loss for a company. 

  How much does it cost for your company?

   Humal Capital is what you invest into a newhire. The simple formula is:

Human capital = Time to get up to speed x (Salary + overhead) x 50%

  For example, a new IT engineer will require 6 months to get up to speed and initially he is 0% usefull. It is assumed that his usefulness increases linearly from day 1 till the last day during his initial 6-month period which means that 50% of this time he produces nothing and even spends some time of other employees to get him onboard. The latter is overhead.

Table 1. Sample calculations for Human Capital   

Salary per month	Overhead	K	Time to get up to speed, m	Human Capital
$ 3 000	$ 450	50%	3	$ 5 175
$  3 000	$ 450	50%	6	$ 10 350

     If at some point of time in the future this particular IT engineer quits the company, then all money we invested in him (Human Capital) is lost. This is our company's human capital drain.

Human capital drain = Human Capital x Staff turnover (%)

       For example, if you have 30 employees in your department and your turnover is 2% per month, then you would be losing $3105 (3 month period to get up to speed) or $ 6210 (6 month period to get up to speed) per month. It is 3,5% and 6,9% of the monthy salary respectively.

 Table 2. Sample calculations for Human Capital Drain 

Time to get up to speed	Human Capital per person	Qty	Turnover per year, %	Human Capital Drain per year
3 months	$ 5 175	30	24%	$ 37 260
6 months	$ 10 350	30	24%	$ 74 520

Of course, this is a simplification, but you have an idea.