Leadership Retention & Development

What Does It Actually Cost When a Good Leader Leaves?

Organizations readily budget for replacing people. But what might they have been willing to invest in keeping the right person before that person decided to leave?

Organizations are usually willing to spend money when someone leaves:

Then there are the hours of senior leadership time spent finding the replacement, and the months of reduced productivity while the new person learns the organization. We accept all of that as the unavoidable cost of replacing someone.

But there is another question organizations do not ask nearly enough: What would we have been willing to spend to keep the right person before they decided to leave?

Because turnover is expensive. Really expensive.

Start with 33.3%

Work Institute, which analyzes employee retention and exit data, uses 33.3% of an employee's annual base salary as an estimate of the total cost of turnover.

That includes direct expenses such as recruitment and onboarding, as well as indirect costs such as lost productivity, management time and disruption while a position is vacant and a replacement gets up to speed.

Other estimates go considerably higher. Gallup estimates that replacing an individual employee can cost between one-half and two times that person's annual salary, depending on the role and circumstances.

Let us stay conservative.

Example: one leader

Monthly salary: ฿100,000

Annual salary: ฿1,200,000

One employee. One departure. ฿400,000.

And that is using the conservative number.

Now compare that with the cost of developing them

Imagine instead that the organization provides that leader with individual executive coaching twice a month.

That is more than five years of coaching for the cost of replacing that person once.

That does not mean coaching guarantees someone will stay. It does not.

People leave organizations for all kinds of reasons—career opportunities, family circumstances, compensation, relocation and many others.

But it does raise an important financial question: Why are organizations so comfortable budgeting hundreds of thousands of baht to replace people, while hesitating to spend a fraction of that amount developing and supporting them while they are still there?

Senior leadership turnover costs more than a recruitment fee

When a senior leader leaves, the organization does not simply lose a name on an organizational chart. It loses:

• Institutional knowledge, history and context
• Trusted relationships with employees and stakeholders
• Understanding of the team and organizational culture
• Knowledge of why previous decisions were made
• Momentum on current initiatives

And often, other people are affected by the departure.

This matters particularly in schools.

A principal does not simply perform a collection of tasks. That principal may lead dozens of teachers, interact with hundreds of students and families, oversee major initiatives and shape the day-to-day culture of an entire division.

Replacing the person does not instantly replace those relationships.

Schools already know how expensive turnover is

The Learning Policy Institute estimates that large U.S. school districts can spend nearly US$25,000 replacing one departing teacher once separation, recruiting, hiring and training costs are included.

International-school recruitment can bring additional costs.

In one published example, Kellett School calculated the cost of recruiting 13 international staff at approximately £11,500 per appointment. The figure included advertising, overseas recruitment trips, interviews and onboarding expenses such as temporary accommodation.

Now move up the organizational chart.

Replacing a senior leader can involve international searches, recruitment firms, interviews, travel, relocation, visas, housing support, transition time and months of organizational adjustment.

The invoice from the recruiter is only the part you can easily see. Trust us. We know.

Leadership also affects whether other people stay

This may be an even bigger financial issue.

A school does not only need to retain its principal. It needs the principal to create an environment where good teachers want to remain.

A 2024 qualitative study involving teachers from nine international schools across all six Gulf Cooperation Council countries found that positive administrative support and school culture were among the most important factors affecting teacher retention.

Gallup's workplace research tells a similar story more broadly: leadership and management have an outsized effect on the engagement of the people they lead. The State of the Global Workplace 2026 found that global manager engagement fell from 31% in 2022 to 22% in 2025.

That means investing in one leader may have implications far beyond that individual.

A struggling leader does not struggle alone. Their leadership affects a team.

What if the best retention strategy starts before someone wants to quit?

Most organizations conduct an exit interview after someone has resigned. Think about the timing of that.

And then we ask: “What could we have done differently?”

That is useful information for the future. But it is too late for this employee.

Proactive leadership development asks those questions much earlier:

• Where are you struggling?
• What is becoming unsustainable?
• Which relationship is creating the most difficulty?
• Where are you stuck?
• What are you avoiding?
• What would make you more effective in this role?
• What needs to change?
• What support do you need?

Those conversations do not guarantee retention. But they give organizations a chance to address problems while there is still someone there to retain.

Consider five leaders

Let us make the numbers bigger.

Five senior leaders

Two private coaching sessions per person, per month

Monthly investment: ฿30,000

Annual investment: ฿360,000

The entire annual coaching investment for all five leaders is less than the conservative estimated cost of replacing one.

Again, coaching cannot promise that nobody will leave. That is not the argument.

The argument is that retention deserves investment before turnover happens.

We spend enormous amounts reacting

This is the part we find interesting.

Organizations routinely spend money on recruitment, replacement, onboarding, transition, vacancies, search firms, training the new person and recovering from lost momentum.

Yet proactive support can somehow feel optional.

Perhaps we have the equation backwards.

Instead of asking:

“Can we afford to invest in individualized development for our leaders?”

Organizations may need to start asking:

“What does it cost us when we do not?”

Keeping every employee forever is not the goal. Turnover will always happen. Sometimes it should.

But when you have a talented leader you want to keep, supporting and developing that person is not merely a nice employee benefit.

It may be one of the less expensive investments you can make.

Support your leaders before the problem becomes a resignation

TeamBridge Thailand provides confidential, individualized executive coaching for senior leaders. Organizations can offer ongoing coaching as proactive professional development—giving leaders a place to work through current challenges, strengthen their leadership and address problems before they become bigger ones.

Coaching is available in person in Chiang Mai and online.

Talk to TeamBridge Thailand

Sources

1. Work Institute — Employee Turnover Solutions & Strategies
2. Gallup — This Fixable Problem Costs U.S. Businesses $1 Trillion
3. Learning Policy Institute — 2024 Update: What’s the Cost of Teacher Turnover?
4. Tes Magazine — The Hidden Costs of High Teacher Turnover
5. ERIC — International Schools and Teacher Retention: A Qualitative Study
6. Gallup — State of the Global Workplace 2026