Work out how long a new hire takes to generate enough value to repay their hiring and ramp cost.
Simple payback divides the up-front cost by the recurring annual benefit to get the number of years before the new hire has paid for itself. Everything after that point is net gain, which the lifetime figures make explicit. Payback is the first screen most buyers apply: a system that pays back inside its warranty period is a very different proposition from one that does not.
Payback Period Employee
Payback (years) = Hiring and ramp cost ÷ annual monthly value the hire delivers
Payback (years) = Hiring and ramp cost ÷ annual monthly value the hire delivers Simple payback divides the up-front cost by the recurring annual benefit to get the number of years before the new hire has paid for itself. Everything after that point is net gain, which the lifetime figures make explicit.
Payback is the first screen most buyers apply: a system that pays back inside its warranty period is a very different proposition from one that does not.
This calculator takes 3 inputs: Hiring and ramp cost, Monthly value the hire delivers, Expected life. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.