The Real Cost Of Losing a Senior AEC Hire
When a senior project manager, principal engineer, or studio lead resigns, most firms instinctively price the departure as the cost of finding a replacement. While that number is already significant it is also a fraction of the true cost.
The full cost of losing a senior AEC hire sits in four buckets, and only one of them is visible as a direct cost. Understanding the other three is how firms are able to justify investing more in retention and increase their bottom line.
Here we will talk through each cost for a senior project manager earning $140,000 at a mid-sized Canadian AEC firm.
Direct replacement cost
For a senior PM, the replacement cost typically runs between 20 and 30 percent of annual salary when recruitment is handled externally. Add to this internal HR time, onboarding, and initial training. For a $140,000 role, that is roughly $35,000 to $45,000, depending on how quickly the role is filled.
This is the only number most firms consider; but it is the smallest cost in the grand scheme of things.
Lost productivity
A senior PM is typically not operating at full effectiveness for the first six months in a new firm. They are learning the firm's projects, clients, internal processes, and team dynamics. Industry research on knowledge-worker transitions puts ramp-up at 50 percent effectiveness in month one, rising to full effectiveness between month six and month nine.
If you value the PM's output at their fully loaded cost (roughly 1.4 times salary, so $196,000 annually), half-effective for six months represents about $49,000 in lost productivity. That is before you count the productivity loss in the three months between the resignation announcement and the new hire's start date, during which the outgoing PM is transitioning and the team is absorbing the work.
Combined productivity cost: typically $70,000 to $90,000.
Project disruption
This is where the numbers get larger and less predictable. A departing senior PM is usually in the middle of two to four active projects. The firm has two options: redistribute those projects to other senior staff (who are already at capacity) or assign them to the new hire when they arrive (which delays ramp-up further).
In practice, most firms end up doing a mix of both, with the new hire inheriting the most complex project six months in and the team absorbing the rest. The cost shows up as schedule slippage, additional hours worked by other staff, and occasional scope slippage on fees.
For a portfolio of mid-sized projects, a senior PM departure often adds 3 to 5 percent to total project costs across the affected work. For a firm doing $20 million in revenue, one senior departure can quietly cost $30,000 to $50,000 in project margin erosion.
Team and client ripple effects
This is the hardest cost to quantify and often the largest. Senior AEC staff are relationship holders. They have client contacts that go back years. They are the stability that makes younger staff willing to join and stay.
Generally, a senior PM's client relationships do not transfer cleanly. Some clients follow the PM to the new firm. Others take the opportunity to reassess whether they want to continue the engagement with your firm at all. Firms that lose a senior PM typically see at least one meaningful client conversation reopen within six months.
When a respected senior leaves, junior staff notice. The probability of additional departures in the following 12 months rises measurably. At a mid-sized firm you may see two or three junior resignations in a year, each costing 15 to 20 percent of salary to replace, can easily add another $40,000 to $60,000.
Combined ripple cost: wide range, $30,000 to $150,000 or more depending on the specific situation.
The Total
Adding the four buckets for our $140,000 senior PM example, the conservative total sits between $180,000 and $320,000. For a senior architect or principal, the numbers can be materially higher because client relationships and design continuity are even more portable.
The replacement invoice is typically 10 to 20 percent of the true cost of the departure.
What The Math Means For Retention
A $5,000 market-rate salary adjustment for a senior PM who is passively considering a move costs 2 to 3 percent of the true cost of losing that person. A structured career-path conversation, a meaningful project assignment, or a role redesign that addresses the actual reason they are looking costs less.
Most senior AEC departures are not primarily about compensation. In our experience, the reason someone leaves is almost always one of four things: the growth path ahead of them feels blocked, the work has lost its interest, the commute or life logistics have shifted, or the relationship with a direct manager has deteriorated. All four of those have intervention points that cost far less than a replacement cycle.
Where Firms Go Wrong
The most expensive mistake we see is assuming the market is the reason a senior employee is looking. By the time they are actively searching, the root cause is usually six months old, and compensation alone isn’t enough to fix it.
The second most expensive mistake is treating resignations as one-offs. When a firm has lost two senior PMs in 18 months, the pattern usually points to an organizational issue, not a recruiting issue. Fixing the organizational issue is harder and slower than hiring, but the return is much higher.
The firms that retain senior AEC talent well are not the ones paying the most. They are the ones with the clearest growth conversations, the most deliberate project assignments, and the strongest manager relationships. The math gives those investments a much higher return than most firms realize.
Sources
Axis Recruitment, "The silent struggle: Why top talent isn't always actively looking for work." https://www.axisrecruitment.ca/blog/the-silent-struggle-why-top-talent-isnt-always-actively-looking-for-work
Society for Human Resource Management, replacement cost research.
Work Institute, annual retention reports, 2023 to 2025.
Axis Recruitment internal placement and retention data, 2024 to 2025.
