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QuickFlight Industries, an 1,800 employee firm, is faced with a serious and growing absenteeism problem. Last year, total employee hours lost to absenteeism came to 119,808. Employees are paid wages and receive benefits for the hours they are absent.
Level
% of employees
Average Hourly Wage
Cost of benefits paid
Technical
65%
$25.15
38% of annual cost of wages
Clerical
25%
$19.80
Management
10%
$37.60
Employees work 8 hours a day (40 hours per week) for 245 days out of the year.
To manage absentee related issues and problems when employees do not show up to work, 45 supervisors spend, on average, 40 minutes per day, for the 245 days they work per year addressing these matters. The average salary of this group is $29.35 per hour.
Additionally, the company estimates it pays an additional $729,500 each year in compensation for temporary employees to cover the work of those that are absent. The HR Director at QuickFlight Industries assigns you the task to estimate the total impact and cost of employee absenteeism so that management can better understand the dimensions of the problem. Explain your and and detail the formulas you used to solve this.
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