Evaluating the Financial Impact of Human Resources Management Activities:

Exercise: Evaluating the Financial Impact of Human Resources Management Activities:
Reduced Turnover Costs
Walden University

  1. Calculation of Benefits of Higher Employee Retention Using a Base of Year 1
  1. Number of employees: Reduction in turnover with a base of year 1
  Example: Number of executives in year 2 have been calculated:
                  12.8 – 11.5 = 1.3 % (0.013)   ( 127 x 0.013 = 1.651 = 2
|Personnel Category             |Years                   |                             |                             |
|                               |2                       |3                           |4                           |
|Executive (n=127)               |2 (1.65)                 |5 (4.57)                     |6 (5.72)                     |
|Physician (n=367)               |2 (1.84)                 |1 (0.73)                     |9 (9.18)                     |
|Other Professional (n=615)     |3 (3.08)                 |27 (27.00)                   |43 (43.05)                   |
|Non-Professional (n=804)       |                         |                             |                             |
|All Categories (n=1913)         |22 (21.71)               |15 (15.28)                   |38 (37.79)                   |
|                               |                         |                             |                             |
|                               |29 (28.70)               |48 (47.83)                   |96 (95.65)                   |



  2. Total Incremental Savings from Higher Employee Retention for all Personnel Categories for Years 2, 3, and 4.
      Example: Total Incremental Savings from Higher Employee Retention for all Personnel Categories for Years 2, 3, and 4 has been calculated (Nkomo, Fottler, and McAfee, 2010; Exhibit 1.8, page 3):
      $12,027.00 x 2 = $24,054.00
|Personal Category               |Savings in Year             |                         |                             | Total Saving               |
|...