Dear All,
I am working for a software firm, would like to know how do you calculate total employee cost & total replacement cost, as in what are the components which could be included?
Looking forward to hear from you all...
Regards,
Sarita.
From India
I am working for a software firm, would like to know how do you calculate total employee cost & total replacement cost, as in what are the components which could be included?
Looking forward to hear from you all...
Regards,
Sarita.
From India
Hi Sarita,
Employee cost includes the total cost incurred by the organisation to maintain the particular employee or a group of employees at current rates. It includes salary and cost of fringe benefits, cost of training undergone.
Replacement cost is more complex. It involves the following costs:
1.Seperation costs:
the costs incurred for exit interviews;
administrative functions related to termination;
separation/severance pay; and
any increase in unemployment compensation.
2.Vacancy costs:
include the net cost/savings incurred due to increased overtime or temporary employees needed to complete the tasks of the vacant position.
3. Replacement costs :
include the cost of
attracting applicants(recruitment);
selection process costs
travel/moving expenses;
preemployment administrative expenses;
medical exams; and
acquisition and dissemination of information.
4.Training costs:
include both formal and informal training costs. Performance differential recognizes the difference in productivity between those who leave and their replacements
Typically separation, replacement, and training are all net costs. However, vacancy costs and the performance differential can result in either a net cost or savings. For example, if overtime and/or temporary employees' costs are less than the employee would have earned while the position is vacant, a vacancy savings occurs. If the new employee's performance exceeds the predecessor's, a net performance benefit can result.
Intangible costs are just as real and often much greater than the costs we can quantify. Examples of intangible costs include: the uncompensated increased workloads other workers assume due to vacancies, the stress and tension turnover causes, declining employee morale, and decreased productivity due to loss of work group synergy. These costs are very real. However, they are difficult if not impossible for most businesses to measure.
Just be aware that calculating the tangible costs will provide you with only a portion of the total cost of employee turnover.
best wishes
Rajeev.V
From India
25Employee cost includes the total cost incurred by the organisation to maintain the particular employee or a group of employees at current rates. It includes salary and cost of fringe benefits, cost of training undergone.
Replacement cost is more complex. It involves the following costs:
1.Seperation costs:
the costs incurred for exit interviews;
administrative functions related to termination;
separation/severance pay; and
any increase in unemployment compensation.
2.Vacancy costs:
include the net cost/savings incurred due to increased overtime or temporary employees needed to complete the tasks of the vacant position.
3. Replacement costs :
include the cost of
attracting applicants(recruitment);
selection process costs
travel/moving expenses;
preemployment administrative expenses;
medical exams; and
acquisition and dissemination of information.
4.Training costs:
include both formal and informal training costs. Performance differential recognizes the difference in productivity between those who leave and their replacements
Typically separation, replacement, and training are all net costs. However, vacancy costs and the performance differential can result in either a net cost or savings. For example, if overtime and/or temporary employees' costs are less than the employee would have earned while the position is vacant, a vacancy savings occurs. If the new employee's performance exceeds the predecessor's, a net performance benefit can result.
Intangible costs are just as real and often much greater than the costs we can quantify. Examples of intangible costs include: the uncompensated increased workloads other workers assume due to vacancies, the stress and tension turnover causes, declining employee morale, and decreased productivity due to loss of work group synergy. These costs are very real. However, they are difficult if not impossible for most businesses to measure.
Just be aware that calculating the tangible costs will provide you with only a portion of the total cost of employee turnover.
best wishes
Rajeev.V
From India
Leaders,
I would like to have your inputs in helping me understand the following calcutions for a software development firm :-
a) How to calculate cost per employee?
b) How to calucate expenses per employee?
Any theories or templetes on the above will be highly appreciated :)
In anticipation...
Thanks & Regards,
t u s h a r
From India, Mumbai
I would like to have your inputs in helping me understand the following calcutions for a software development firm :-
a) How to calculate cost per employee?
b) How to calucate expenses per employee?
Any theories or templetes on the above will be highly appreciated :)
In anticipation...
Thanks & Regards,
t u s h a r
From India, Mumbai
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