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The 100 employee IT department of a financial service company had a high turnover rate. A survey of employees revealed that the reason most left was dissatisfaction with the level of training. The average turnover rate was 23% per year. The cost of recruitment and train one new employee was Rs.56,625. To address the turnover problem, the company developed a skills training programme that averaged 80 hours per year per employee. The average employee wage was Rs. 35 per hour. Instructor, classroom and other costs were Rs.1,70, 000/.
a) What is the total cost of training? The total cost of turnover?
b) If the turnover rate is dropped 8% (from 23% to 15%), what was the financial benefit of the programme?
c) What is the ROI of the training programme?
d) How much would the turnover rate have to be reduced from 23% for the training programme to show a benefit?
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