OPTIMIZE COST

Benefits of Modelling and Visualizing Costs (and Benefits) of Employee Attrition and Performance:

The goal of for-profit firms is to maximize the economic value for shareholders; finding ways to lower costs or increase performance is a crucial step in achieving this goal. Cost models help business leaders quantify costs associated with certain activities and processes (like mistakes in hiring, voluntary turnover etc).

Cost models also create a repeatable process enabling managers to apply this model to multiple situations - i.e. if attrition goes up by 2% what will that cost the business vs. if attrition goes down by 6% what will that save the business. Through this business process, the company can develop a metric that becomes the standard expected rate of return for projects.(i.e. what is the expected rate of return on hiring someone).

(This can be compared to customer analytics projects calculating the expected rate of return for customers. Many customer analytics projects today calculate the expected rate of return - or even predict the lifetime value of a customer. This exact approach is applied with calculating employee value)

Cost Models safeguard the company from losing money when engaging in activities (like hiring, exiting or promoting) that seem profitable but really are not.

Cost of Attrition Calculator: You now have an opportunity to compute your Organization's Cost of Attrition

  • A. Project Tasks

    Client identifies role and KPI(s) to be cost modelled.

    • Understand the costs related to eg. 45% turnover in the Sales Manager Role
    • Understand cost savings with reducing turnover by 5% or 10% etc., or
    • Understand the costs associated with missed sales targets in the Sales Manager Role
    • Resourcing Gap Analysis - by FTE / skills
    • Understand which is costing the company more - not finding top performers, or hiring too many bottom performers

    Define Data Requirements and Available Data

    • Define performance metrics, groups, and other data variables currently available in Client's Employee datasets

    Find and Send Data to Acumetric Analytics

    • Client sends data to Acumetric Analytics
    • Client arranges for appropriate people to participate in a conversation(s) around actual (when possible) and estimated costs (when necessary)

    Modelling

    • Combine cost data with KPI data

    B. Deliverables

    • Detailed Summary of Cost / Benefits / Daily Breakeven Points / Cumulative Breakeven
    • Targeted recommendation about which area to focus on to decrease costs and increase benefits

    C. Timeframe

    • 2 weeks of Acumetric Analytics consulting time
    • (Actual timeframe largely dependent on Client's ability to line up the right conversations and access the right data quickly)

    D. Cost Modelling Project Fee

    • 2 weeks (80 hours) of analytics consulting