Workplace Turnover Formula

Here is the Workplace Turnover Formula.
You can download for your own copy.

 

Turnover_formula.pdf

 

SMART WORK ETHICS
Workplace Turnover –Let’s do the Math
What does it cost your bottom line when you have employee turnover?
U.S. Department of Labor reports that employee turnover cost is between 30% to 200% of a worker’s annual salary.
THE COST OF EMPLOYEE TURNOVER
—Pre-departure Costs

 

—Termination Costs

 

—Recruitment Costs

 

—Training Costs

 

—Productivity Costs

 

—Vacancy Costs

 

—Hidden Costs

 

The formula:
Multiply the number of employees by turnover rate by wage per hour by hours per week by weeks per year by 30% cost of turnover. This is turnover cost. Divide by Profit Margin. Total is increased sales needed to make up cost of turnover.
Example:
25 employees
X turnover rate (36%) (9 employee positions per year)
X hourly rate (8.50)
X hours per week (40)
X weeks per year (52)
X cost of turnover (30%) (number from U.S. Department of Labor)
= total cost of turnover
25 X 36% X $8.50 X 40 X 52 X 30% = $47,736.00
Now, divide by profit margin (20%) (example)
$47,736.00 divided by 20% =
$238,680 Total number of sales needed to make up for turnover.
Now do your own numbers! See next page.
Workplace Turnover –Let’s do the Math
________ (Number of employees) X _______ (your turnover rate)
X ________ (hourly wage) X ________ (hours per week) X
________ (weeks per year) X ________ (cost of turnover (30%)
= __________________(total cost of turnover)
NOW—Divide by your profit margin
= _____________ (total cost of sales to make up for turnover)
YOUR turnover rate is determined by dividing the number of workers who have left by the number of workers when you have a full staff to carry out the functions of your company.
Example: 10 people have left (three for the same position)
Total number of workers necessary to carry out the functions of your company 37
10 divided by 37 = 27% turnover rate for your company
When you are ready to change this number give us a call.
SmartWorkEthics.com is a division of
THE SMART SOLUTIONS GROUP
Joanie S. Stephen
(251) 990-2507 (888) 759-3712   195 Pemberton Loop Fairhope, AL 36532
http://www.SmartWorkEthics.com      Joanie@SmartWorkEthics.com

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