The recommended annual rewards budget is taken as 1% of total payroll. SHRM recommends an annual R&R budget of 1-2% of an organization's payroll.
Onboarding Saving is the salary given to a new hire during the onboarding period.
Additional revenue is taken as five times the salaries of retained employees as typically employee salaries are 15%-20% of an organization's revenues.
Total investment cost
The total investment cost is the sum of Recommended Annual Rewards Budget and Total Empuls Platform Costs.
Total R&R Impact
Total R&R impact is the sum of Turnover Savings, Productivity Gains, Absenteeism Savings, Onboarding Savingsand Additional Revenue.
The Total Productivity Gain is the product of the total number of employees, their average annual salary, and the increase in productivity. While Gallup's research says productivity increases to 21%, we have taken 20% here.
The turnover savings is calculated by multiplying the average cost to replace an employee multiplied with the number of employees estimated to be saved/retained. According to Gallup, the cost of replacing an employee is between one to two times of their annual salary. We have taken it to be 1.5 times. According to research by Bersin and Associates a meaningful recognition program reduces voluntary turnover by 46%.
Absenteeism Savings is the product of the number of employees with their daily salary and reduction in absent days. We have taken 2 days as the reduction based on Gallup's research and the average days of absenteeism.
Total Returns is calculated as the Total investment cost subtracted from the Total R&R impact.