A r c h i v e d  I n f o r m a t i o n

Calculating Cost Savings Cost Benefit of Employee Time Saved Employee Cost Assumptions Average Salary Total Employee Cost (1.3 x Salary)* Annual Working Hours Vacation/Holiday Total=5 weeks Cost per Hour (Total Employee Cost/ Annual Working Hours) Percent Work Time Saved       $   1,880       $ 80% * Estimate of the total employee cost of salary plus benefits. Formula for Calculating Cost Benefit of Employee Time Saved Consultation and Referral Cases** X Average Hours Saved = Total Hours Saved X Cost per Hour = Total Labor Savings X Percent Work Time Saved = Total Company Savings       $ $ 80% $ ** This category can change to measure such factors as the number of employees involveed in utilizing education-focused programs and benefits Cost Benefit of Higher Performance/Increased Focus and Motivation Employee Cost Assumptions Average Salary Total Employee Cost Annual Working Hours Cost per Hour       $       $ 1,880       $ Calculation of Cost Benefit of Additional Output Due to Increased Focus/Motivation If each employee using the family-resource program gained only 30 minutes of output per month due to increased focus and motivation, the annual cost savings would be: Number of Cases Additional Hours of Output (Number of Cases x 6 Hours) Annual Working Hours $ Savings (Additional Hours x Cost per Hour)           $       $ Cost Benefit of Employee Retention Turnover Cost Assumption The combined cost of recruiting, training, relocation, new employee inefficiency, and the inefficiencies of by a vacant position are estimated to total between 75 percent and 150 percent of direct salary. 1 Calculation of Cost Benefit of Employee Retention Number of Cases Number of Employees Retained (.005 x Number of Cases) Average Cost of Turnover (.75 x Direct Salary) $ Savings (Number Retained x Turnover Cost)           $       $ Cost Benefit of Preventing Health and Mental Healthcare Costs Background and Assumptions Seventy-two percent of all workers experience three or more stress-related illnesses "somewhat often" or "very often" over the course of a year. 2 Calculation of Cost Benefit of Stress Reduction/Preventing Healthcare Costs If only 5 percent of the employees using the family-resource program avoid one healthcare case, the cost savings would be: Number of Cases Employees Who Avoid Further Care (.05 x Number of Cases) Average Case Cost, Health and Mental Health $ Savings (Number of Employees x Average Case Cost)     $1,925       $ Cost Benefit of Reduced Absenteeism Absenteeism Rate Assumption Employees with dependent-care responsibilities are absent approximately five days per year due to family obligations. 3 Calculation of Cost Benefit of Reduced Absenteeism If each employee using the family-resource program reduced absenteeism by only five hours per year, the cost savings would be: Number of Cases Absenteeism Hours Saved (5 Hours x Number of Cases) Cost per Hour $ Savings (Absenteeism Hours Saved x Cost per Hour)           $       $ 1 Dana E. Friedman, Linking Work-Family Issues to the Bottom Line The Conference Board, Report 962, 1991, p. 12. 2 Northwestern National Life Insurance Co., Employee Burnout: America's Newest Epidemic, 1991, p. 5 3 Ellen Galinsky & D. Hughes, "The Fortune Magazine Child Case Study," Unpublished paper, Bank Street College of Education, New York, 1987.

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