HVAC Tech Turnover Cost 2026: Raise or Replace?

When a good tech hands in notice, the first question is usually "who do we hire?" The better question is "what is this about to cost us, and would a raise have been cheaper?" This guide puts a number on turnover — first from published research, then line by line for your own shop — and gives you a simple raise-vs-replace rule. For state-by-state pay tables, see HVAC technician pay by state; for commission and spiff structures, see HVAC technician pay plans.

Where pay sits right now

The BLS Occupational Employment and Wage Statistics survey (May 2025) puts the national median for heating, air conditioning, and refrigeration mechanics and installers at $29.33/hour ($61,010/year), with the 10th percentile at $40,050/year (about $19.25/hr) and the 90th at $95,210/year (about $45.77/hr). Source: BLS Occupational Employment and Wage Statistics, "Heating, Air Conditioning, and Refrigeration Mechanics and Installers" (49-9021), May 2025

That spread is the market your techs can see. A tech with strong certs and a clean callback record who is paid well below the upper part of that range has somewhere else to go.

The shortage isn't easing, so pay isn't either

The same BLS Occupational Outlook Handbook projects employment of HVAC/R mechanics and installers to grow 11% from 2025 to 2035 — much faster than the average occupation — with about 40,600 openings projected per year nationally (new jobs plus people leaving the trade). That's a national applicant pool that isn't growing fast enough to fill the openings, which is a structural reason wages keep climbing rather than a temporary blip. Source: BLS Occupational Outlook Handbook, "Heating, Air Conditioning, and Refrigeration Mechanics and Installers"

If your hiring plan is still "post it on Indeed and wait," you're competing for the same shrinking pool as every other shop running that same plan.

What a bad hire — or a hire who leaves — actually costs

It's tempting to treat a departure as just "find another body." The research says otherwise. The Center for American Progress reviewed 30 case studies across 11 published research papers on the cost of employee turnover (covering separation, recruiting, screening, and training costs, plus lost productivity while a replacement gets up to speed) and found the typical cost of replacing a worker is about 20% of that worker's annual salary for jobs paying $75,000 or less — the band most HVAC techs fall into — and 16% for jobs paying $30,000 or less. Source: Center for American Progress, Heather Boushey and Sarah Jane Glynn, "There Are Significant Business Costs to Replacing Employees" (Nov. 16, 2012)

Applied to the May 2025 BLS median of $61,010, 20% is roughly $12,200 every time a tech at the median wage leaves. That's a research average. Your own number is usually easier to believe once you build it yourself.

Build your own turnover cost (worked example)

The line items below are the usual costs of replacing a service tech. The dollar amounts are made-up round numbers to show the math — replace each one with your own.

In this example, the idle truck and the ramp-up gap are two-thirds of the cost. That's typical of the math, not a statistic: the biggest cost of a departure is the gross profit you don't earn, not the job ad. The free HVAC technician turnover cost calculator runs this with your numbers.

Raise vs. replace: a simple decision rule

A raise isn't just the hourly bump. Payroll taxes, workers' comp, and some benefits scale with pay, so price the raise loaded. The free labor burden calculator gives you your burden rate.

Loaded annual cost of a raise = raise per hour x 2,080 x (1 + your burden rate on wages).

Example (made-up numbers): a $3/hr raise at a 15% wage-scaling burden costs $3 x 2,080 x 1.15 = $7,176 a year. Against the $19,500 turnover cost above, the raise pays for itself if it keeps that tech for about one more year than they'd otherwise stay.

The rule:

1. If the tech meets your standard (callback rate, reviews, attitude) and the loaded annual cost of the raise is less than your turnover cost, give the raise — ideally before they ask.
2. If the tech is below standard, a raise won't fix it. Put the gap in writing with a date, and start building your bench.
3. Either way, check that your price book can carry the new pay. Run it through the break-even hourly rate calculator. If it can't, the fix is pricing, not pay.

Retention checklist: catch it before the notice

• Every tech has a written pay ladder: what moves them to the next level and what it pays.
• Pay is reviewed against the BLS range for your state at least once a year.
• Each tech gets a short one-on-one each month: what's frustrating, what they want to learn.
• You track turnover (departures in the last 12 months / average headcount) and the reason for each departure.
• New hires have a written first-90-days plan (see the 90-day onboarding plan).
• You know your replacement cost from the table above and use it in pay decisions.
• You keep a bench: an apprentice, a referral list, or a standing conversation with a trade school.

For the hiring side — where to recruit and how to interview — see how to hire and keep HVAC technicians and the HVAC technician interview questions. The Growth Room's toolkit has a free tech hiring scorecard and first-year onboarding checklist.

Your pay ladder next to other shops

Pay and turnover vary by market and shop size. The anonymous Owner Numbers survey includes tech pay and shows where your shop lands.