Spanish companies spent an estimated €27 billion in 2025 replacing employees aged over 45 who had been dismissed the previous year, according to a study by human resources consultancy Talengo. The findings suggest that efforts to reduce costs by replacing experienced staff with younger workers can generate substantial expenses beyond redundancy payments.
The study, based on official statistics from Spain’s Ministry of Labour and the National Statistics Institute (INE), examines what Talengo describes as ageist workforce management: dismissing older employees and recruiting younger replacements in the belief that doing so will reduce costs.
The estimate assumes that about 90% of dismissed workers are replaced, based on a figure cited by trade unions, while the remaining 10% of positions are eliminated. It then applies benchmarks from the Human Capital Index and the Society for Human Resource Management, which put the cost of replacing an employee at between half and four times their annual gross salary, depending on the position and the experience and knowledge of the departing worker.
The largest immediate expense is redundancy compensation, followed by recruitment and the search for suitable candidates. Employers may hire specialist recruiters to fill vacancies, while training new employees adds further costs. Spain’s State Foundation for Employment Training estimates that companies spend an average of €638 a year per employee on vocational training, although expenditure can rise considerably for senior management positions.
Most of the estimated €27 billion replacement bill was associated with managerial roles. Of the total, €24.845 billion went towards replacing managers, while €2.181 billion was spent on replacing non-managerial workers in lower-skilled positions.
Among the management group, middle managers accounted for 85%, members of executive committees for 14%, and senior executives — including chief executives and other board members — for 1%. Replacing senior leaders can be particularly expensive because companies often use executive search firms, or headhunters, whose fees exceed those charged by conventional recruitment agencies. Training and career development programmes for these positions can cost between €30,000 and €50,000, the study’s authors said.
Beyond these direct expenses, companies also face what Vivian Acosta, a partner at Talengo, calls “invisible costs”: the time and resources required for a new employee to become fully effective in a role previously held by an experienced worker.
That adjustment period can last between 18 and 24 months, regardless of the departing employee’s salary category. During this time, companies may struggle to find younger workers with the necessary skills and experience, while new recruits need time to acquire the knowledge required to perform at the same level as their predecessors.
“Organisations remain exposed and weakened in the market for up to two years,” Acosta warned, describing the potential loss of competitiveness as an opportunity cost that is difficult to quantify.
The consultancy argues that companies may initially improve their accounts by reducing payroll costs but fail to recognise the value of employees who possess detailed knowledge of their business and have contributed to its success. Acosta also contends that experienced workers can make more effective use of artificial intelligence because they have the accumulated knowledge needed to formulate the right questions and apply the technology productively.
Despite these costs, dismissals of older employees have continued to rise. Between 2020 and 2024, Spain dismissed 1,138,519 workers aged over 45, equivalent to 14.3% of employed people in that age group and 5.1% of the country’s total employed population. The figures cover the latest period available in the Ministry of Labour’s statistics on dismissals and their costs.
The number of workers over 45 dismissed in a single year first exceeded 200,000 in 2022, reaching 272,000 in 2024 — a 20% increase over three years. Those aged between 45 and 54 were the largest affected group, accounting for 642,761 dismissals between 2020 and 2024, or 56% of all dismissals among workers over 45.
Acosta said some companies effectively halted employees’ career progression if they had not reached a pre-management position by the age of 45. The INE estimates that 51% of employed people in Spain are already at least 45 years old, leaving a substantial share of the workforce potentially exposed to age-related employment decisions.
Talengo’s central conclusion is that prioritising younger employees in the pursuit of productivity does not necessarily create greater value for a business, particularly when the cost of losing experience and replacing it is taken into account.
