Notes
Where estimates have been used in these calculations, they are based on minimum improvement statistics from previous case studies.
Management turnover - research shows the average cost of replacing a manager or executive can be up to 10 x salary package (Source: EPFirst/ Saratoga)
This is due to hidden costs such as reduced productivity, knowledge loss, knock on customer and key employee loss etc. For ease, here we have used an amount equivalent to one salary. If you have calculated what it costs to lose a manager or executive within your organisation, enter that amount in the 'Replacement cost' box.
Other employee turnover - research shows that the average cost of replacing an employee is around £4000.
Here we have halved that figure. If you have calculated the cost of replacing an employee please enter it in the 'Replacement cost' box.
Improved employee engagement - an 'engaged employee' is one who is fully involved in, and enthusiastic about, his or her work, and thus will act in a way that furthers the organisations interests.
Engaged employees are 20% more productive (Corporate Leadership Council).
Our calculation is based on improving the bottom line by 1% as a result of increased employee engagement. In practice the figure is likely to be higher.
Alignment to strategy and business goals - this line is estimated as a 1% improvement in the bottom line. Actual results are likely to be higher.
Management time savings - this represents number of managers x 1 day per annum at the average salary rate.
Other employee time savings - this has been estimated at one day of the average management salary rate saved per 50 employees.
Increased motivation leading to better productivity - this line is estimated as a 1% improvement in the bottom line. Actual results are likely to be higher.
Targeted development - this has been estimated at an amount equivalent to 10% of the annual learning and development budget.