Cost of replacement

How it works

Add fee + loaded cost during vacancy + quality miss. First-90-day failure is the early slice. Retention after regularization is how you stop paying this tax. For a U.S. company hiring one Filipino teammate, write this into the brief, the employment contract, and the peso payroll file before the start date. Slack habits do not override the Labor Code, BIR, or NPC. If the local employer of record holds the paper, they run the statutory step; you still owe a clean operating definition so the seat does not fail in week three. Put a number on the example when you budget loaded cost, because a nameless allowance always returns as a December surprise or a missed SLA.

Example: fail month 8, new $2,400 search, three empty weeks of a $1,800 loaded seat, plus a missed close. Real cost > $4,000, not ‘just the fee.’

How it differs

Replacement search is the action. First-90-day failure is the early metric. Bench would have reduced vacancy if you had paid for one.

Common errors

Counting only the recruiter invoice.

In practice

Treat Cost of replacement as a week-one operating object. Put a peso or dollar figure on the next twelve months. If the word cannot survive that arithmetic, it is marketing. Write an owner - founder, local employer, or worker - and a date you will look at it again: first cutoff, first holiday, or first miss. If nobody can show a contract clause, a payslip line, a calendar block, or a checklist box, you do not have cost of replacement yet. You have a conversation. Convert the conversation before the person starts, while changing the deal still costs a paragraph rather than a resignation. Re-read the worked example above against the actual hire in front of you. If the numbers in that example cannot be swapped for this seat’s pesos, hours, and start date, the brief is still unfinished.