Hidden Loss in Company

Do you ever think about how your company profit structured? Is it only profit / loss = revenue – operational cost? Well, I think it isn’t.

I think that company profit / loss most of the time forget about hidden cost. This hidden cost could be anything. From structural cost, under utilization cost or even turn over rate cost. So profit / loss = revenue – operational cost – hidden cost.

One of the hidden cost that I would like to elaborate here is turn over rate hidden cost. In the company that I work with once there is a period of time where turn over rate is quite high. The reason behind this high turn over rate is numerous, and this is not the case. The problem with high turn over rate is quite clear. But do we calculate it well?

Every company spend some money / capital to increase its employee knowledge, whether through expensive training, conference, working experice, etc. The idea is to keep this cost documented, the cost for training, conference and many other thing, even experience gain from the daily work. If you have this cost documentation for every person that leave your company, than you certainly have something to calculate about the loss that turn over caused. The cost is equal to every penny that your company spend over this person.