Michigan Health System's Turnover-Cost Formula

May 29, 2003

Here's a formula that the University of Michigan Health System uses tocalculate the cost of a turnover:

_________________ average staff salary
X________________ 50 percent replacement cost for 40 days (to fill job)
+________________ the value of eight hours of supervisor time to interview;
+________________ (average staff salary x 50 percent for the first three months, to account for training and reduced productivity);
+________________ 25 percent of lead person's (trainer) salary for three months.
=________________  total cost of turnover