In a business-cost analysis to determine average employee contribution, which indirect formula should be used?

• A. Number of employees who have left divided by the average number of employees multiplied by 100
• B. Total payroll divided by headcount
• C. Sum of benefits divided by total employees
• D. New hires divided by current employees

Answer: (A)

When estimating how much value the workforce contributes on average, turnover is a practical indirect indicator. The formula takes the number of employees who have left during a period and divides it by the average number of employees, then multiplies by 100 to express it as a percentage. This turnover rate reflects how stable the workforce is and signals the impact on productivity, training, and replacement costs—factors that influence overall average contribution over time.

Using this measure smooths out month-to-month fluctuations by employing the average headcount in the denominator, giving a clearer view of churn relative to the workforce size. In contrast, other options focus on direct cost allocations (average pay, benefits per employee) or recruitment activity (new hires), which don’t directly capture the ongoing effect of employees leaving on the organization’s average contribution.