How Much Will It Cost?

This will depend on the policies and procedures you implement. However, the cost of not implementing work life balance can be much higher:

Poor Performance, Absenteeism and Sick Leave

Cost of Sick Leave To calculate the direct cost of sick leave take the annual salary and employer costs @ 11% ÷ by 260 days x number of days sick = cost

e.g. If an employee on £15,000 p.a. takes 11 days sick leave a year, the calculation is:

£15,000 + £1,650
--------------------- x 11 = £704.42 cost to organisation
260

Source: Opportunity Now

Higher staff turnover, recruitment and training costs.

Recruitment costs for a junior manager post Personnel costs
20 hours personnel time @ £15 per hour £300.00
Stationery and copying

£156.00
Management costs
5 hours shortlisting @ £25 £125.00
16 hours interviewing @ £25

£400.00
Advertising costs
Advert in a national newspaper & specialist journal

£2,000.00
Total cost of recruiting a junior manager to your organisation:

Source: Opportunity Now
£2,981.00

Cost of training a junior manager This example illustrates the typical cost of providing five days in-organisation training for an employee whose salary is approximately £15,000 p.a.

Trainers costs (per trainee training day)
Salary, 40 hours @ £30 an hour (divided between eight people attending course)

£150.00
Trainee costs £300.00
Salary, 40 hours @ £7.50
Temporary cover (see next chart)
Expenses

£250.00
Overheads
Equipment & materials £150.00
Premises

£50.00
Total cost to your organisation of an initial training course for a new Junior Manager: £900.00

Source: Opportunity Now

Cost of providing temporary cover for junior manager If a post at £15,000 a year is vacant for two months, this may be covered by an employee 'acting up' and additional supervision by the line manager. This might result in a total of 40 hours overtime at a cost of £312.64. The costs of temporary cover uses the salary that would otherwise have been paid.
Overtime
Line manager @ £18,000 p.a. at 2 hours per week £138.40
For 8 weeks = 16 hours @ £8.65 per hour £300.00
Employee 'acting up' £15,000p.a. @ 3 hours
Per week for 8 weeks = 24 hours@ £7.26 per hour £174.24

Total cost to your organisation of temporary cover £312.64

Source: Opportunity Now

Assuming you can attract the right staff, there is a cost attached to a new recruit learning the job.
Cost of a new recruit learning the job The length of time before a new recruit can perform to an efficient standard depends on the recruit's previous experience, the standard of work expected and the skills required. This example calculates the costs of limited functioning where a new recruit earning £15,000 p.a. is 60% efficient (A) and 40% inefficient (B), becoming fully efficient after one year (C).
The cost of limited function = Area of triangle ABC = 0.5 x 1 x 0.4 x 15,000

During that year you are paying for the limited functioning of that new employee, so, for an employee earning £15,000 p.a. Triangle ABC (inefficient functioning) = £3,000

Source: Opportunity Now

Summary
In this example of how much will it cost, the total cost of replacing a member of staff on £15,000 p.a. was almost £7,000.

Recruitment costs £2,566.00
Training costs £312.00
Temporary cover £810.00
Limited functioning £3,000.00
Total cost: £6,688.00

Source: Opportunity Now

Research has shown how small businesses can benefit from working arrangements that enable employees to balance their work and home lives.

A report by the Institute for Employment Studies shows some small businesses can save up to £250,000 on their budget, simply by using Work-Life Balance solutions.

This report can be found at http://www.employment-studies.co.uk/summary/summary.php?id=384

Last Updated: 08/08/2007 16:07:57 By Richard Perry