The ABCM OF EMPLOYEE RETENTION - The company’s performance appraisal

Factoid:  Employee turnover is the largest hidden cost in organizations.

“A penny saved is a penny earned.”

Activity Base Cost Management (ABCM) allows us to quantify the wasted dollar$ of yesteryear’s casual “hit the door” policy.  I’ve designed a worksheet to help measure how well your organization is doing. 

Once completed, you can begin to problem solve.  (i.e. Should we change our interview process?  Have we identified problem departments?)

Ê  Just fill in the blanks.  Add or delete to customize. 

DIRECT CO$T$ Recruiting                             Training (Basic)                   Relocation/Moving	$ ________________ $______ __________ $ ________________
+	+
INDIRECT CO$T$ Lower Productivity Levels    Lower Employee Morale    = Lower Revenues	$ ________________ $ ________________ = $ ________________
+	+
HIDDEN CO$T$ Training costs, including management time      Paying full salary and benefits during training, before full productivity is reached  Lost sales and alienated customers during off-site training    Cost of mistakes made by new inexperienced employees       Loss of customers loyal to departing employees       Loss of knowledge and experience built by departing employees      Lost or damaged relationships with suppliers     Employee morale and customer perception of that morale	$ ________________ $ ________________ $ ________________ $ ________________ $ ________________ $ ________________ $ ________________ $ ________________
TOTAL TURNOVER CO$T$	$ __________________________

Versus

EDUCATION  INVE$TMENT

$ _________________

The moral of this exercise

Education is an investment.  It's a value added line item!

http://www.pwickman.wix.com/education