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By Staff Report
Feb. 7, 2008
Worksheet: Calculating Turnover Costs
Turnover Ratio: The number of employees who left, divided by the average number employed per year. | |
Separation Costs | |
Interviewer’s time (hours spent x hourly rate*) | $ |
Terminated employee’s time (while on payroll: hours spent x hourly rate) | $ |
HR administrative functions (terminated paperwork: hours spent x hourly rate) | $ |
Separation pay | $ |
Total separation costs | $ |
*Include benefits in the hourly rate. | $ |
Replacement Costs | |
Advertising | $ |
Internal communications (development time x hourly rate) | $ |
Interview time (hours spent x hourly rate for interviewer) | $ |
Administrative functions (typing, copying: hours spent x hourly rate) | $ |
Applicant testing (such as validated aptitude tests) | $ |
Applicant travel expenses | $ |
Applicant relocation expenses | $ |
Total replacement costs | $ |
Training Cost | |
Employee workbooks (printing + time for development x hourly rate) | $ |
Orientation(s) (new employee time + staff time x hourly rates) | $ |
On-the-job training (employees’ time x hourly rates) | $ |
Total training costs | $ |
Separation + Replacement + Training = | $ |
Per Employee Cost | |
(total costs ÷ number left in the company) = | $ |
Source: (The Career Press, 2007) |
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