The cost of hire for employing a new manager is calculated at $45,000. Revenue attributable to an employed manager has been calculated at $155,000 annually when the manager is fully functioning. However, during the first six months the cost / value add of the manager during their learning curve period has been calculated at (-$13,000, -10,000, -$7,000, -$5,000, -$2,000 and finally $0 in the sixth month).
A. Assuming after the six month period the new manager attains the positive rate ($155,000 annually) in what month will the company break even on its investment in the new manager?
B. What if the company was required to relocate the manager’s family as well, increasing the cost of hire by $60,000 – what month would the company break even on the investment?
C. If the employee left the company after 16 months what would be the ROI for this manager?
Situation as noted in A
Situation as noted in B