Calculating Employee Turnover

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FACTORS INVOLVED IN CALCULATING “EMPLOYEE TURNOVER”:-

 

1. Advertising : The details of Advertising Expenses for Financial Year 2010-11  are:-

Sr .No.	Date	Particulars	Amt
1.	12/01/2011	Lokmat Main Issue	19,909/-
2.	25/01/2011	Dainik Bhaskar Main Issue	1806/-
Total			Rs.21,715/-

 

The amount taken is rounded i.e.Rs.22,000/- for posts of suppose 5 sales executive requirement. Therefore, 22000/5 = Rs.4,400.

 

2. Other Direct Costs : It will include Uniform Expenses i.e. Rs.260/- per Salwar Suit and Name Tag Rs. 20/- per head. Hence the cost against one employee comes out to be:-

= 260 *2 +20 = Rs. 540/- (approximate Rs.600/- is taken on sheet).

 

3. Interviewing (costs of current employees at all levels of interviewing, from

initial phone call through final interviews)

 

The cost of HR Manager is taken as she is involved in the recruitment process. Her salary is Rs.8000/- per month for 10 hrs duty.  The interview timing is from 11 to 1 and 4 to 7 i.e. 5 hrs each day. The Walk-ins are for 3 continous days. Hence, the calculation comes out to be;

= 8000/26 = 308 per day for 10 hrs (i.e. for 5 hrs )= 308*5/10=Rs.154/- per

day. = Rs.154*3 days = Rs. 462/- per day = 462 / 10*60 = 0.77  Rs. per min *15 = 11.55 Rs (approximate Rs. 12  is taken on sheet).

 

4. Checking reference: Approximate Rs. 10 is taken on sheet (Phone call charges and the time spent against it).

 

5. Lost Revenue: It includes cost of time spent from actual jobs. Hence it includes the same cost as point no.4.

 

6. Miscellaneous indirect cost : it includes the cost incurred on phone call, Xerox, Fax) : Approximate Rs.10 is taken.

 

7. Time spent by person/people directly responsible for training new hire to do job = Rs.8000/26 = Rs.308/- per day for 10 hrs job. Hence for 1 hr contribution towards training sales executive = 308*1/10 = Rs.31 each day. = 31*26 days = Rs.806 per month. Hence for six months, the amount comes out to be = 806*6 = Rs.4836 (i.e. approximate Rs.5000 is taken on sheet).

 

8. Cost per participant of general training programs, training materials, seminars for new hires = Rs. 3000/- (three  modules of training MASTERING PRODUCT, CUSTOMER CONNECT & RACING AHEAD)  i.e. Rs.1000/- per training.

 

9. On-the-job training costs before employee becomes fully productive: It will include the six months salary of that sale executive. Rs.4000 times 6 months = Rs.24000/-.

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Calculating Employee Turnover

I have Attached Calculating Employee Turnover in Excel Format

Employee Turnover Calculator
Position: Sales Executive								Salary Level: Rs.4000/-
Hiring Costs
Direct Costs to hire 1 new employee
Advertising									4,400
Average fee to employment agencies, placement firm									–
Sign-on-bonus									–
Referral bonuses to other employees									–
Travel and Expenses (include yours and money you reimburse to prespective candidate)									–
Other Direct Costs (Uniform Expenses, Name Tag)									600
Total Direct Costs to Hire									5000
Indirect Costs to hire 1 new employee
Interviewing (costs of current employees at all levels of interviewing, from initial phone call through final interviews)									12
Checking References									10
Lost Revenue (include costs of time spent away from actual jobs)									12
Miscellaneous indirect Costs (phone, copy, fax)									10
Total Indirect Costs to Hire									44
Training Costs
Direct Costs to train 1 new employee
Time spent by person/people directly responsible for training new hire to do job.									5000
(i.e. Cost per hour times number of hours)
Cost per participant of general training programs, training materials, seminars for new hires									3000
Travel and expenses per participant for above									–
Other direct costs									–
Total Direct Costs to train									8000
Indirect costs to train 1 new employee
General training in Company									–
On-the-job training costs before employee becomes fully productive									24000
Total indirect costs to train									24000
Estimated Revenue Lost by Vacant Position									225000
TOTAL COSTS: SINGLE EMPLOYEE									37044
Annual Cost of Employee Turnover
To Calculate the annual cost of employee turnover, multiply the cost of replacing 1 employee times the number of replacements each year.
i.e. 37044 X 4 = Rs. 1,48,176 /- (the amount represents total cost against 4 replacements in a year)

 

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