Cost of Fragmentation Calculator – Embeddable Cost of Fragmentation Calculator Discover the hidden costs of scattered Total Rewards systems and quantify the financial impact on your organization 1. Avoidable Attrition Cost Formula: (# of regrettable leavers × average salary × 1.4) × 5% Number of regrettable leavers per year ? Employees who left your organization that you would have preferred to retain. Exclude retirements and performance-based exits. Count only regrettable departures in the past 12 months Average salary of departed employees ? The average base salary of employees who left. Include bonuses if they’re a significant portion of compensation. $ Replacement typically costs 1.4x the annual salary Annual Attrition Cost $70,000 2. Underutilized Benefits Cost Formula: % unused × total benefits budget Total annual benefits budget ? Include all discretionary benefits: wellness programs, learning budgets, childcare support, mental health services, etc. $ Total spend on voluntary/discretionary benefits Estimated percentage of benefits unused ? Studies show 15-30% of benefits go unused because employees don’t know about them. Be conservative in your estimate. % Typical range: 15-30% for fragmented systems Annual Underutilization Cost $800,000 3. Administrative Burden Cost Formula: HR hours per month × cost per hour × 12 months HR hours per month on manual rewards administration ? Time spent reconciling data, maintaining spreadsheets, answering questions, and managing vendor files. hrs Include data reconciliation, reporting, and inquiries Fully-loaded cost per HR hour ? Include salary, benefits, overhead. Typically 1.5-2x hourly wage rate. $ Include salary, benefits, and overhead Annual Administrative Cost $57,600 Total Annual Cost of Fragmentation $927,600 Attrition Costs 8% Underutilization 86% Admin Burden 6% Ready to Eliminate These Hidden Costs? Discover how Semos Cloud’s Total Rewards Hub can unify your systems, make your investments visible, and deliver measurable ROI. Schedule a Consultation Learn More
