# LLC HR Calculations Turnover Costs

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HR Calculations and Measurements

The best and most concise way for the HR department to measure its effectiveness in an
organization is through HR calculations and measurements. These numbers provide meaningful
data used to improve business management and to better meet the needs of the employees.

LaborLawCenter™ provides an endless array of HR calculations you can use spanning absence rate,
compensation, recruitment, training, tenure and more. Some calculations are more important than
others depending on your organization’s goals.

These samples are designed with the intent of providing businesses with a general template to use. Please note that general legal
information is not the same as legal advice—the application of law to the company’s specific circumstances. These samples are for
informational and instructive purposes only and may not be suited to every situation.
HR Calculations: Turnover Costs

Turnover is expensive—that’s a given. But do you know precisely how expensive
turnover is for your specific company?

Calculating the turnover costs allows you to budget more precisely for the costs of
each departing worker and estimate the costs—both financial, and in lost
productivity—of the time taken to hire a replacement.

1. Identify the various costs associated with separation:

   Unemployment Insurance
   COBRA continuation
   Cash out of unused vacation
   Costs of lost productivity while the position is vacant

To get an accurate average, take the total amount of separation expenses you paid
out over the past year and divide it by the number of departing employees in the
same timeframe.

2. Identify the various costs associated with replacement:

   Interviewing (costs of the panel’s time; time communicating and
coordinating with candidates, etc)

Again, average the costs of replacement over the past year and divide it by the
number of new hires during the same timeframe.

3. Identify the various costs associated with on-boarding:

   Training the new employee
   Costs of lost productivity while the employee gets up to speed
   Relocation and other employer-paid expenses

Average the costs over the past year and divide them by the number of new hires
during the same timeframe.

4. Add each of the averaged costs together to get the total average turnover
cost.

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 views: 0 posted: 9/17/2012 language: English pages: 2
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