"Do Nothing" Calculation
The following is neither a Tip nor is it 10 of anything. However, we thought you might find it illuminating - or scary!
Team managers are reluctant to invest in their team if budgets are tight. I thought I'd do some back-of-an-envelope calculations on what "doing nothing" is costing a team of 10 people.
These costs do not include Tax, National Insurance, office running costs, temporary staff, infrastructure or any of the wider costs of running an organisation. They are purely a calculation of the costs per individual, using current research to identify areas of major concern to most employers.
For a team of 10, assuming an average salary of £24,000
| Average number of sick days per employee: | 7 per year | £7,630 |
| Average staff turnover: | 16% | |
| Average cost of replacement: | £15,000 | £24,000 |
| Average level of productivity: | 40% | £144,000 |
| Average time each employee spends dealing with conflict / disagreement: | 2 hours per week | £13,080 |
| Total Annual Cost of Poor Team Performance | £188,710 |
To keep things simple, we've assumed that all staff have the same impact on performance, regardless of their role in the team. This illustrates the effects of average performance on the productivity of an organisation, but just imagine what a small rise in the performance levels of your top sales and account managers could have on your bottom line.
If your team is following an average course, with these levels of absenteeism and performance, can you really afford to do nothing?
Talk to Reflection Consulting about your Team's performance and the likely costs to your business.