How Do You Figure The Cost of Doing Nothing?

Ever wished you had a cost of doing nothing calculator?  I have, especially when there were teenagers in the house.  It seemed their idleness cost me plenty.  Seriously, it is not difficult to project the cost of doing something; training, education, buying equipment, hiring staff, taking a vacation, you name it.  But how do you calculate the cost of doing nothing?  It turns out some really smart people have come up with a calculator.

Ken Blanchard Companies has a link to this remarkable tool on their website.  Of course, in this instance it is looking at the costs of not investing in leadership training for an organization.  But I think the concept is both interesting and practical.  Let’s look at in through the lens of preparing for RESPA Reform.

Their cost of doing nothing calculator begins with assessing the cost of employee turnover.  The premise is that it costs employers 30-100% of base salary to replace experienced employees.  This is broken down by taking your current number of employees and their average salary rate, combined with your current turnover rate.  Will you lose employees if you don’t adequately prepare them for the coming changes?  Maybe not (though I have heard some people threaten to turn out the lights and walk away rather than adopt the RESPA changes).  But could you use a similar equation to determine how much efficiency you will lose by waiting until the 11th hour to train staff, change processes and educate customers?   I think so.  Monday we will continue our look at the costs of doing nothing.