# Best Buy Company’s Payroll Costs and Turnover Rate

I was asked to investigate the reasons for the high payroll costs of Best Buy Limited during the past year. A thorough investigation led to understanding that the current turnover rate may be the reason for the issue. The present report demonstrates how turnover affects payroll costs and offers two ways of addressing the problem that will benefit the company in multiple ways.

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Traditionally, the retail business is associated with high turnover for various reasons. Even though Best Buy’s rates (32%) are well below the national average of 60%, it remains a considerable financial burden (Van Abbema). The cost of turnover consists of the price of hiring, onboarding, training, development, and cost of time of unfilled role. The simple formula mentioned by Altman and information about Best Buy staffing presented by van Abbema was used to calculate the approximate annual cost of turnover. The calculations presented in Table 1 show the financial burden associated with the present turnover rate.

 Formula Annual Turnover Cost = (Hiring + Onboarding + Development + Unfilled Time) x (Number of Employees x Turnover Rate) Calculations Annual Turnover Cost = (\$25,000 + \$10,000 +\$10,000 + \$50,000) x (125,000 x 0.32) = \$95,000 x 40,000 = \$3.8 Billion.

Table 1. Best Buy Annual Cost of Turnover.

The results of the calculation need to be explained since it may be wrongly thought to be too high. Even though the cost of hiring, onboarding, development, and unfilled time is an evaluation made by experts, it may be trusted since replacing an employee is a complicated matter. Hiring costs include the time of HR managers, the termination payments, and the fees for advertisements on websites, social media, radio, television, and newspapers. Additionally, administering all the hires and termination fees requires the company to keep an extensive HR staff. In short, the calculations presented in Table 1 are relatively accurate evaluations.

## Works Cited

Altman, Jack. “How much does Employee Turnover Really Cost?” Huffpost. 2017, Web.

“Best Buy Mission, Vision & Values.” Comparably, Web.

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Van Abbema, Alex. “How Best Buy cut its staff turnover more than 30 percent in four years.” Minneapolis/St. Paul Business Journal. 2018, Web.

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