Line | Amount | |
---|---|---|
Long-Term Savings | ||
1 | Annual total compensation cost per employee | (Annual total compensation cost/employee) |
2 | Total number of employees to be laid off | (No.of employees to be laid off) |
3 | Total Long-Term cost savings | (Annual total compensation cost/employee No.to be laid off) |
Short-Term Cost to Implement | ||
4 | Outplacement services (generally a minimum of $500 per employee) | ($ in outplacement services per employee) |
5 | Severance package per employee (generally several weeks pay and benefit continuation for each year of service) | ($ in salary and benefit continuation per employee) |
6 | Accumulated paid vacation | ($ in accumulated vacation per employee) |
7 | Total cost per employee | (Sum Lines 4–6) |
8 | Total cost to implement layoff | (Multiply Line 2 Line 7) |
9 | Net Short-Term Cost Savings (Benefit) | (Line 3 Line 8) |
Line | Item | Amount |
---|---|---|
1 | Recruitment,selection,and orientation cost expended per employee laid off (can amount to $12,500 to screen and $7500 to orient) | ($ per employee laid off) |
2 | Training investment per employee hired as a replacement (can amount to $3000 per person per year) | ($ per employee laid off) |
3 | Recruitment,selection,and orientation cost expended per employee hired as a replacement (can amount to $12,500 to screen and $ 7500 to orient) | ($ per employee laid off) |
4 | Market premium paid to attract replacement into the company | ($ difference between salary of the laid-off person and salary offered to the replacement) |
5 | Cost of additional supervision (estimate the percentage of a supervisor’s time required during the first year times the supervisor’s salary) | (% of additional supervisor’s time required supervisor’s salary) |
6 | Economic opportunity cost of lower productivity during first year of the replacement’s employment | (% at which the new person works estimate of the value of his work output during the first year) |
7 | Total long-term cost per replacement | (Sum Lines 1–6) |
8 | Number laid off | (No.laid off) |
9 | Total long-term cost for replacing those laid off | Line 7 Line 8 |