Delivering Strong Financial Results Through Low Turnover

As a follow up to my post in January, “How We Staffed a New Uranium Mine”, I want to share the financial results delivered  by my HR Department and the 24% employee turnover (TO) rate from the recent hiring campaign in 2013.
It is  commonly accepted that each job separation costs a company between 16% and 20% of the employee’s annual salary (16% for <$50,000 and 20% for >$50,000).  Some studies have even shown that TO cost can run as high as 50% to 200% of an employee’s annual salary.  I chose to go with the more conservative 16-20%.
I analyzed our  hourly employee population of 42 and calculated our average TO cost per employee to be $7,194 and rounded it down to an even $7,000.  Our  average TO cost per employee with the salaried population included is $9,440.  I again chose to be conservative and use the lower hourly number of $7,000 in the table below.

Total Population
Seps %
Seps #
TO Cost/per
Total
Svgs from Act
Actual
24%
13
$  7,000.00
 $   91,000.00
   $                   –
Projected
80%
48
$   7,000.00
 $  336,000.00
 $  245,000.00
Projected
90%
54
$   7,000.00
 $  378,000.00
 $  287,000.00
Projected
100%
60
$   7,000.00
 $  420,000.00
 $  329,000.00
The 13 separations we had in 2013 cost  a total of $91,000.  As can be seen in the last column, Svgs from Act, we saved between $245,000 and $329,000 by having a significantly lower TO rate than expected.  Along with support from the management staff at the mine, I attribute the much of the low TO rate and resulting cost savings to the successful design and execution of the HR Department’s recruiting and hiring strategy!  

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