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RedicasLife / RedicasJob / ArticlesForJob
The Cost of Turnover Blue Money and Green Money Turnover Cost Calculations

The Cost of Turnover
A worksheet for use in calculating what turnover costs. It includes direct costs, such as the cost of background checks, as well as indirect costs, such as lost productivity.

The chart below can be used to show the "green money" or actual costs of turnover, and the "blue money" or softer costs of turnover.

Blue Money and Green Money Turnover Cost Calculations
Green Money (actual) Costs:
1. Last paycheck, accrued vacation, separation pay   $_______________
2. Increased unemployment tax $_______________
3. Continued benefits $_______________
Blue 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 $_______________
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 $_______________
Blue 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 $_______________
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) $_______________
Blue 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 $_______________
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 $_______________

From, Manager of Choice reprinted with permission of Davies-Black Publishing, a division of CPP, Inc., 3803 East Bayshore Road, Palo Alto, CA 94303 Copyright 2003 by Nancy S. Ahlrichs. All rights reserved.

-- Redica 2003-12-3 10:59 am

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