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beyond the cash reward. Specifically, the cash is here today gone tomorrow problem, the how much cash is enough consideration and the attached bad feelings it may engender if the recipient feels it was an insufficient amount creating a demeaning commentary on the worth of the employee’s efforts. This is an area where consultation with a promotional products specialist can provide guidance. Consider the continuing ROI of a quality award displayed or worn by the employee long after cash is forgotten and its continuing motivational effect on others within the organization. After the hire, there is the orientation expense. The necessary time required from various segments of the company to familiarize the new hire with the people, culture, benefits, policies, and practices of their new employer. This cost while relatively easy to calculate is often overlooked or lumped in with the cost of initial job training. Many in company management would agree that it takes three months for any employee to actually start earning their wages and six months before a new employee’s wages produce any tangible bottom-line benefit to the company. After the orientation cost and OJT cost there are the harder to calculate costs associated with professional development, tuition reimbursement and new skills training.

Numerous surveys exist to calculate some portion of recruitment costs. According to information published in the Delaware Economic Development Office Resource, the U.S. Department of Labor estimates employee turnover can cost between $20,000 and $30,000 per incident; whereas, The International Telework Association & Council (ITAC) says to figure one-third of an employee’s annual salary. These figures are at best only estimates and when it comes to top management or technical talent costs, other studies indicate substantially greater cost figures. The following table may assist in recruitment cost calculations:

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Current Rate of Turnover Number of employees leaving per year: Average number of employees: Divide line a by line b % of turnover = line c X 100

Annual Cost of Employee Turnover to the Company Employment Advertising: Employment Agency and Search Fees: Employee Referrals Program Costs: February 2013 • Brilliant Results 9

Brilliant Results February 2013  
Brilliant Results February 2013  

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