True cost analysis

What it really costs when your compliance person leaves

Most firms cost a corp sec departure at the salary they save until the replacement is hired. The real number is two to three times that, once recruitment, training, partner time, late fees, and client confidence are factored in.

The five hidden costs behind the real number

The salary saving is the visible line. These five are the cost.

Recruitment cost

$15k to $35k

Roughly 20–30 per cent of annual salary, paid to the recruiter or in internal hiring time. Higher for senior corp sec roles where the talent pool is shallow.

Reduced productivity during training

3 to 6 months at 60–70%

A new corp sec hire is rarely fully productive before three to six months. Their first cycle of annual reviews is partner-supervised. The output curve climbs slowly.

Partner review time covering the gap

50+ hours, $15k+

Partners absorb the work that would otherwise route to the corp sec specialist. At $300 per hour, fifty hours is fifteen thousand of work that should not be on a partner's desk.

ASIC late fees during transition

$1k to $5k for a 100-entity firm

Most firms slip on at least a couple of deadlines during a corp sec departure. ASIC late fees are $102 within one month, $428 over one month, per occurrence.

Client confidence loss

Hard to quantify, real

A client who gets a late notice from ASIC because of a missed lodgement notices. They do not always say something, but the trust costs are real and tend to compound over time.

Worked examples

The departure cost at three firm sizes

All figures are estimates based on our experience helping firms through this. Your numbers will move depending on your specific salary band, entity count, and how the departure plays out.

Small firm

50 entities

$90,000 corp sec

Recruitment

$15,000

Reduced productivity (4 months @ 30%)

$9,000

Partner review time

$10,000

Late fees during transition

$1,000

Estimated total

$35,000

For a 50-entity firm, the cost of a single corp sec departure usually wipes out the saving from doing it in-house in the first place. This is where outsourcing tends to make the most one-sided sense.

Mid firm

200 entities

$110,000 corp sec, full-time

Recruitment

$25,000

Reduced productivity (6 months @ 40%)

$22,000

Partner review time

$18,000

Late fees during transition

$3,000

Estimated total

$68,000

The mid-firm scenario where most partners arrive at this question for the first time. The departure cost is roughly 60% of the annual salary, before factoring in the loss of institutional knowledge.

Larger firm

500+ entities

$130,000 corp sec, plus support

Recruitment

$35,000

Reduced productivity (6 months @ 50%)

$32,000

Partner review time

$22,000

Late fees during transition

$5,000

Estimated total

$94,000

At this scale, having a team rather than a single hire reduces departure cost; one person leaving is no longer the entire function. The firms that get this right have multiple people; the firms that do not have a single point of failure regardless of size.

The cost of a departure has roughly doubled in five years

Three trends are making this worse, not better.

›Corp sec people are scarce. The pool of trained CAS360 specialists has not grown in line with demand. Recruitment timelines have stretched.
›Salaries are rising. Senior corp sec base salaries have climbed 25–30 per cent over five years. Recruitment fees climb with them.
›Tenures are shorter. The average tenure of a corp sec specialist at one firm has dropped from around six years to closer to three. The cost of a departure now hits more often.

How outsourcing changes the equation

Convert a fixed cost into a variable cost

In-house compliance is a fixed cost. You pay the salary whether the workload goes up or down, and you absorb every recruitment cycle whenever your person leaves.

Outsourced compliance is a variable cost. You pay per entity. As your book grows, the cost grows with it. As your book shrinks (or as you offload non-core entities), the cost shrinks too. Crucially, when your provider's staff turns over, you do not feel it.

For a 200-entity firm, the in-house all-in cost is around $130k–$180k per year. Outsourcing the same volume to CoSec sits in the $20k–$35k range, depending on the service model and complexity. The difference is large enough that the maths is one-sided for most mid-sized firms.

Continuity reading

Already lost someone?Operational in 72 hours Key-person riskStrategic framing Continuity checklist12-point firm audit In-house vs outsourcedHonest cost maths

Get a tailored cost analysis for your firm

Send us your entity count and your current corp sec arrangement. We will return a written analysis showing your actual exposure, what outsourcing would replace, and the net difference.