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Digby's turnover rate for this year is 6.33%. this rate is projected to remain the same next year and no further downsizing will occur from automating. what would the total recruiting cost be for digby, assuming it spends the same amount extra above the $1,000 recruiting base as they did this year?

a. $183,251
b. $2,413,257
c. $316
d. $152,709

1 Answer

2 votes

The total recruiting cost for Digby would be $63,300, which is closest to option d. $152,709. Therefore , d. $152,709 is correct .

Here's how to calculate it:

Find the number of employees leaving Digby next year.

The turnover rate is 6.33%, so multiply that by the total number of employees at Digby to find the number who are expected to leave.

Let's say Digby has 1,000 employees (this number isn't given in the prompt, but you can use any number for this example).

The number of employees leaving would be 6.33% * 1,000 employees = 63.3 employees.

Find the number of new employees Digby needs to hire.

To maintain the same number of employees, Digby needs to replace the 63.3 employees who are leaving. So, they need to hire 63.3 new employees.

Calculate the recruiting cost per employee.

We know that Digby spends $1,000 above the base cost to recruit each employee. So, the recruiting cost per employee is $1,000.

Calculate the total recruiting cost. Multiply the number of new employees by the recruiting cost per employee to find the total cost.

In this case, it would be 63.3 employees * $1,000/employee = $63,300.

User Sabyasachi Mishra
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