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Are the calculated benefits of reduced turnover sufficient to justify the $680.000 in increased costs associated with the expansion of the Human Resource Management Department?
| Are the calculated benefits of reduced turnover sufficient to justify the $680.000 in increased costs associated with the expansion of the Human Resource Management Department? Would your answer be the same if reduced productivity during the learning period was excluded from the analysis? | |||||
| Annual Turnover Rate by Category for Years One through Four: | |||||
| Personnel Categories | One | Two | Three | Four | |
| Executive (n=127) | 12.8 | 11.5 | 9.2 | 8.3 | |
| Physician (n=367) | 18.1 | 17.6 | 17.9 | 15.6 | |
| Other Professional (n=615) | 22.6 | 22.1 | 18.3 | 15.6 | |
| Nonprofessional (n=804) | 29.0 | 26.3 | 27.1 | 24.3 | |
| Totals (n=19.3) | 23.8 | 22.3 | 21.3 | 18.8 | |
| Personnel Category | |||||
| Turnover Costs | All Categories | Executive | Physician | Other Professional | Non-professional |
| (n=1913) | (n=127) | (n=367) | (n=615) | (n=804) | |
| Separation Costs: | |||||
| Exit Interviews | 50.73 | 62.50 | 73.00 | 51.00 | 38.50 |
| Administrative Costs | 119.27 | 127.00 | 132.50 | 116.00 | 114.50 |
| Separation Pay | 348.01 | 2254.00 | 1034.00 | 0.00 | 0.00 |
| 518.01 | 2443.50 | 1239.50 | 167.00 | 153.00 | |
| Replacement Costs: | |||||
| Job Advertisement | 1346.49 | 1805.00 | 2416.50 | 1127.50 | 953.00 |
| Pre-Employment Administration | 353.80 | 405.00 | 416.50 | 386.50 | 291.00 |
| Entrance Interviews | 324.86 | 486.00 | 724.50 | 284.00 | 148.00 |
| Assessment Testing | 271.69 | 382.50 | 695.00 | 214.50 | 105.00 |
| Staff Time | 249.00 | 417.50 | 522.00 | 212.00 | 126.00 |
| Travel/Moving Expenses | 293.68 | 1215.50 | 1110.50 | 0.00 | 0.00 |
| Processing New Employees | 87.50 | 87.50 | 87.50 | 87.50 | 87.50 |
| Medical Examinations | 175.00 | 175.00 | 175.00 | 175.00 | 175.00 |
| 3101.50 | 4974.00 | 6147.50 | 2487.00 | 1855.50 | |
| Training Costs | |||||
| Informational Literature | 80.00 | 80.00 | 80.00 | 80.00 | 80.00 |
| Formal Training | 147.53 | 340.00 | 516.50 | 35.00 | 35.00 |
| On-The-Job Training | 68.15 | 0.00 | 0.00 | 212.00 | 159.50 |
| 295.68 | 420.00 | 596.50 | 327.00 | 274.50 | |
| Reduced Productivity | |||||
| during Learning Period | 3133.37 | 4000.00 | 6500.00 | 3452.00 | 1215.50 |
| Total | 7048.56 | 11837.50 | 14483.50 | 6433.00 | 3528.50 |
| 1913.00 | 127.00 | 367.00 | 615.00 | 804.00 | |
| $13,483,895.28 | $1,503,362.50 | $5,315,444.50 | $3,956,295.00 | $2,836,914.00 | |
| Department Budget per Year | |||||
| Budget Cost | One | Two | Three | Four | |
| Salaries and Benefits | 110,000 | 233,000 | 288,000 | 324,000 | |
| Equipment and Supplies | 24,000 | 39,000 | 48,000 | 57,000 | |
| Communications | 41,000 | 62,000 | 73,000 | 81,000 | |
| Totals | 175,000 | 334,000 | 409,000 | 462,000 | |
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