Based on Company with 50 Employees

Current Cost (Estimate)

(Source) Cost Elements

Target Cost After Implementing Complete HR

Potential Saving*

HR: Compliance  

$2,500

(DOL) 2 hr/ee/yr

$0

$2,500

HR: Employee Relations  

$21,250

(SHRM) 17 hrs/ee/yr

$5,125

$16,125

HR: Basic HR Training

$2,500

(SHRM) 2 hrs/ee/yr    

$1,250

$1,250

HR: Orient & Enroll  

$2,500

(SHRM) 2 hrs/ee/yr  

$0

$2,500

HR Staff  

$49,200

HR Clerks.+ (23% in benefits/taxes)

$12,300

$36,900

Benefits:  Administration

$1,250

(BLS) 1 hr/ee/yr

$0

$1,250

Payroll: Time Collection  

$1,200

(Kronos) If manual,

$600

$600

$24-$48 /ee/yr

Payroll: Processing  

$4,800

(ADP, Paychex)

$2,400

$2,400

$96-138 /ee/yr

Payroll: Tax Filing

$500

(ADP) $10 /ee/yr

$250

$250

Payroll: Reports

$375

(ADP) $7.50 /ee/yr

$0

$375

Work Comp  Adm.  

$800

(AON) $10 /ee/yr

$0

$800

Handbook, SPD, Training update and distribution

$5,000

(DOL) $100 per employee average per year

$1,250

$3,750

Total Estimated Annual Costs

$91,875

$23,175

Complete HR Estimated Annual Costs & Savings

$30,000

to

$45,000

$23,700

to

$38,700

*Actual savings may vary

Turnover Cost Calculations

NOTICE PERIOD
Green Money (actual) Costs:

1. Last paycheck, accrued vacation, separation pay  

$_______________

2. Increased unemployment tax

$_______________

3. Continued benefits

$_______________

Soft Money Costs
(appropriate salary/hour x time spent on each activity):

1. Administrative costs for processing the separation: process benefits; contact unemployment office, Payroll IS departments; schedule exit interview; etc.

$_______________

2. Lower productivity: employee, peers, supervisor, subordinates

$_______________

3. Exit interview, transition meetings

$_______________

VACANCY PERIOD
Green Money (actual) Costs:

1. Advertising and recruiter fees

$_______________

2. Interview expenses (meals, mileage, or other)

$_______________

3. Printing costs for company marketing materials

$_______________

4. Assessments

$_______________

5. Criminal checks, reference checks, credit checks, etc.

$_______________

6. Medical exams and drug tests

$_______________

7. Temporary/contract employee costs

$_______________

8. Overtime costs

$_______________

9. Relocation expenses and salary

$_______________

Soft Money Costs
(appropriate salary/hour x time spent on each activity):

1. Lost productivity: peers, supervisor, subordinates

$_______________

2. Advertising creation and placement

$_______________

3. Recruiter selection

$_______________

4. Administrative costs: ordering forms and copies of annual reports, scheduling and scoring assessments, coordinating with hiring manager and others, etc.

$_______________

5. Resume screening

$_______________

6. Interviews: first, second, third

$_______________

HIRING/ORIENTATION PERIOD
Green Money (actual) Costs:

1. Orientation materials (handbook, video, handouts, etc.)

$_______________

2. Formal training programs (materials, course fees)

$_______________

3. Informal one-on-one training (materials, if any)

$_______________

Soft Money Costs
(appropriate salary/hour x time spent on each activity):

1. Orientation participants’ salaries

$_______________

2. Lost productivity: peers, supervisor, subordinates

$_______________

3. Administrative costs: orientation setup, ordering materials, etc.

$_______________

4. Informal training and one-on-ones

$_______________

HIDDEN COSTS

1. Missed deadlines and shipments

$_______________

2. Loss of organization knowledge

$_______________

3. Lower morale due to overwork

$_______________

4. Learning curve

$_______________

5. Client issues due to turnover

$_______________

6. Loss of client relationships

$_______________

7. Disrupted department operations

$_______________

8. Chain reaction turnover

$_______________

Total Replacement Cost

$_______________