Regis University Estimate of Turnover Cost Discussion
Hello, Please answer the below question. This is a HR class. I have attached the Long Turnover Calculation Formula that is needed.
Question: Using the Long Turnover Calculation in the Course Content, create an estimate of turnover costs for your current position (or a previous position) and discuss why or why not the estimate seems accurate?
Note: The cost of turnover is difficult to determine because actual costs do not show up as a line item on a financial report. Some common turnover cost estimates are 50% of the annual salary and benefits for exempt employees and 35% for nonexempt employees. If the position is specialized, the cost can be as high as 150% of annual salary!
Another important consideration regarding turnover is the effect on productivity. When an employee is planning to leave, productivity often declines. When a new employee is hired, ramp-up time is required for optimum productivity. In addition, the productivity of other employees is affected because they are providing on-the-job-training and resources for the new team member. If the productivity change negatively affects quality, there can be severe ramifications for a company.
Other elements of cost from voluntary and involuntary turnover include transfers, absenteeism, and tardiness. Employees committed to the organization come to work on time. Those employees who are looking for another job predictably miss work leading up to their departure. Search firm fees, training, severance, and sign-on bonuses also enter into the formula, as does time required to recruit and interview a new employee. Unfortunately, legal costs must be considered in many instances of downsizing and termination.