Are Your Workplace Policies Working? Use This Calculator to Measure Your Company’s Turnover Costs

February 12, 2019

February 12 marks the introduction of the Family and Medical Insurance Leave Act (FAMILY Act) into both houses of Congress. The FAMILY Act would create a national paid leave program that would cover working people across the country. It would allow moms and dads paid time off to care for or bond with a new child, partners and spouses time to care for a sick loved one and military caregiving. The Act is respectful of the diversity of modern families and recognizes that the need for family leave can extend beyond the traditional parent-child relationship, for instance, ensuring that a grandparent can take time to care for an ailing grandchild. The Act would provide much needed support to the 83 percent of workers without family leave through their employers and the less than 40 percent that have medical leave through an employer-provided disability insurance program.

Paid leave is widely popular with the public with voters across the country recognizing the need for a national paid family leave program. States and cities helped build momentum for paid leave at the national level through their own successful paid leave programs. Like the FAMILY Act, many of these programs require a small contribution from both the employee and the employer. Opponents to paid leave often claim that these policies are job-killers and impose an undue burden on businesses. Evidence shows, however, that these state and city programs have been very successful without hurting employers.

Research by CEPR’s Eileen Appelbaum and CUNY’s Ruth Milkman also found that paid leave can help employers by reducing turnover costs. Skeptics may still say that the examples above won’t apply to them and the unique needs of their particular companies. To assist employers with calculating the savings paid leave can offer, CEPR, along with the Center for Law and Social Policy (CLASP), is relaunching the Turnover Cost Calculator updated for 2019.

The Turnover Cost Calculator lets employers and human resources staff calculate their own unique turnover costs. By plugging in wages, hours, recruiting, hiring costs, and training costs, HR managers can determine how much turnover impacts their bottom line for different categories of workers. As CEPR’s Eileen Appelbaum wrote at the time of the original launch of the calculator:

“To illustrate the cost of turnover, we used $13.22 an hour for hourly paid employees and $47.46 an hour for salaried employees. Plugging these wages into the turnover calculator and making reasonable estimates for the time spent hiring an hourly-paid worker yields a turnover cost for this worker of $4,299. Costs multiply rapidly if turnover of lower-paid workers is high – rising to $42,991 if 10 workers quit during the course of a year. The turnover cost if a salaried (exempt) employee quits in this example is $26,624.”

It is past time for the United States to adopt a national paid Leave program. Passage of the FAMILY Act will allow America to catch up with the many other countries that already offer national paid leave. And if you are an employer worried about how much this might cost your company versus employee turnover due to workers taking time off to be with their family, there’s a calculator for that.

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