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Are You Calculating the Cost of Turnover?

Few executive-level employees understand how much money their companies lose by failing to retain key employees. Here is your chance to calculate the cost of losing one of your company’s most influential performers.

 

 

Select a job that has been experiencing a high turnover rate. Calculate the full cost of that job by entering the average wage for that position on Line 1 and then multiplying it by 130% to include benefits costs. Next, multiply the total wage by 25%. This cost per employee may then be multiplied by the number of ex-employees in the same job on Line 6 to arrive at the total cost of turnover in this position.

 

 

Here are the steps:

 

Annual wage $ _______
Gross-up for benefits x 1.30
Total wage $ _______
Turnover cost x 0.25
Cost per employee $ _______
Ex-employees x _______
Total turnover cost $ _______

 

 

 

Example:

 

Manager’s Salary $ 67,480
Gross-up for benefits x 1.30
Total wage $ 87,274
Turnover cost x 0.25
Cost per manager $ 21,931
Ex-managers x 10
Total turnover cost $ 219,310

 

 

 

While this seems like a simple calculation, most companies do not know their turnover costs. The cost of turnover impacts your company profits, so I encourage you to figure out how much you are spending today and work on a plan to reduce these costs and add to your bottom line in the future.

 

 

If you would like additional information about the cost of turnover or need help calculating your company’s, please contact us and we would be happy to assist.

 

 

Written By: Kristen Shingleton, M.B.A., CCP

President, New Focus HR LLC

 

 

 

 

 

http://NewFocusHR.com

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New Focus HR is a human resources consulting and training company that services all organizations. Our expert team collaborates with businesses to attract, motivate, retrain and retain their biggest assets, employees. While engaged with an organization, our focus is to find solutions that improve the company’s internal HR-related practices while increasing results at the same time! Our focus. Your results.

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