|
|
Cost of Termination
It takes considerable staff time to process out an employee. The
processing usually takes a few hours to collect badges, keys and company
equipment. The person has to be taken off of payroll and off of company security
lists. There are often benefit program extensions. The typical
Cost of Termination is often between $1000 and $1500. Calculate your
actual cost of termination below:
-
Final paycheck, vacation and separation pay
|
$__________ |
-
Increases in unemployment tax
|
$__________ |
|
|
$__________ |
-
Administrative costs for processing the termination: benefits;
unemployment, Payroll
|
$__________ |
-
Staff Compensation for exit interviews and transition meetings
|
$__________ |
|
Total Cost of Termination
|
$__________ |
|
 |
Cost of Replacement
Usually, the departing employee
has to be replaced. The average cost of hiring and orientation for a
non-exempt employee was about $1,100
(Saratoga Institute - 1999
Human Resource Financial Report). The
average cost of hiring and orientation for an exempt employee was about $9,000 (Saratoga Institute).
The Cost of Replacement figures will vary from one company to another.
Calculate your actual replacement costs below:
-
Advertising, job
postings and recruiter fees
|
$__________ |
|
|
$__________ |
-
Company marketing
materials consumed
|
$__________ |
-
Pre-employment
Assessments
|
$__________ |
-
Background checks,
criminal, references, education, credit etc.
|
$__________ |
-
Medical exams and drug
tests
|
$__________ |
-
Interim employee costs
(temps, contract workers)
|
$__________ |
|
|
$__________ |
-
Relocation expenses and
salary
|
$__________ |
|
|
$__________ |
-
Interviews: first,
second, third
|
$__________ |
-
Orientation and training
program costs
|
$__________ |
|
|
$__________ |
|
Total Cost of Replacement |
$__________ |
|
 |
Cost of Vacancy
Assuming that a job adds value,
your company will experience a loss of revenue for every day your position is
vacant. The amount of loss depends on the position. You can
calculate the Cost of Vacancy as follows:
- Take the total annual
company revenue per employee and divide it by the number of workdays in the year
(usually about 240 to 250).
|
$__________ |
- Multiply this number by the number of workdays
that the job is vacant.
|
$__________ |
- Subtract the cost of pay and benefits for those
workdays since they were not paid out.
|
$__________ |
|
Total Cost of Vacancy |
$__________ |
|
 |
Learning Curve
Productivity LossA new employee is usually not as
productive as the departing employee. The new employee doesn't know the company's
ropes and resources. There is an observable
loss of productivity until the new person's productivity matches the departing
person's. The minimum loss is usually about three
to six months pay and benefits for exempt employees and about twelve months pay
and benefits for a non-exempt employee
(Saratoga Institute). The cost
of replacing a salesperson or a manager is often far greater than the turnover
cost of a non-exempt employee. Which of the following costs are observable
in your company:
-
Missed deadlines and
opportunities
|
$__________ |
|
|
$__________ |
-
Customer problems not resolved
|
$__________ |
|
|
$__________ |
-
Disrupted workflow process
|
$__________ |
|
|
$__________ |
|
Total Learning Curve Productivity
Loss |
$__________ |
|
