Methodology for relating the cost of employee turnover, employee retention, and lost production costs

• Autores: Miguel Salas-Hidalgo, Luis, Antonio Velasco-Taipe, Jorge
• Formato: artículo
• Fecha de Publicación: 2024
• Institución: Universidad Peruana de Ciencias Aplicadas
• Repositorio: UPC-Institucional
• Lenguaje: inglés
• OAI Identifier: oai:repositorioacademico.upc.edu.pe:10757/676317
• Enlace del recurso: http://hdl.handle.net/10757/676317
• Nivel de acceso: acceso embargado
• Materia: cost-benefit analysis; Employee turnover; hidden costs; lost production; mathematical algorithm; retention incentives

Employee turnover generates hidden costs that cannot be recovered, competing with retention costs and their production impact. Using a mathematical algorithm, this study aims to develop a methodology to figure out lost production and related fixed manufacturing overhead costs. This will allow us to estimate the cost of lost output from an employee's layoff until a replacement reaches the required efficiency, considering not only severance costs but also lost production costs. Additionally, we will analyze the cost-benefit of offering salary increases or other incentives against retaining employees, comparing them to the associated costs of increased production and marginal income from the retained employee.