Return on investment calculation

HR Analytics: Predicting Employee Churn in R

Anurag Gupta

People Analytics Practitioner

Total cost of employee turnover

  • Costs to off-board employee
  • Cost-per-hire for replacement
  • Transition costs, including opportunity costs
HR Analytics: Predicting Employee Churn in R

Understand the cost implication of high turnover rate

Turnover overview Scenario 1 Scenario 2 % Change
Total Turnover 300 200 33%
Average Cost of Turnover** $40,000 $40,000 0%
Total Cost of Turnover $12,000,000 $8,000,000 $4,000,000

**Enrich.org

HR Analytics: Predicting Employee Churn in R

Calculating ROI

$$ \text{ROI} = \frac{\text{Program Benefits }}{\text{Program Cost}} $$

 

percent_hike                    -0.59500    0.08134  -7.315 2.57e-13 ***
HR Analytics: Predicting Employee Churn in R

Turnover rate across salary hike range

HR Analytics: Predicting Employee Churn in R

Let's practice!

HR Analytics: Predicting Employee Churn in R

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