Quick Cost Calculator

Where downsizing is likely, this quick calculator is designed to provide a rough and ready indicator of the likely costs of severance for an public sector agency, corporation, or enterprise, or a group of such state owned enterprises (SOEs). The calculator requires at least rough estimates of the levels of redundancy and the costs of redundancy, averaged across the workforce. The "order of magnitude" results that this calculator can give may be helpful in the very first stage of budgeting - and finding sources of funds - for the labor-related costs of private participation in infrastructure or enterprise restructuring. Estimated costs should be entered in the same currency throughout (only numbers - no commas or currency symbols - in the data entry boxes).

Enter here the estimated level of labour adjustment (job losses) over, say, the next five years. This time horizon helps to make sure that you are capturing not just immediate costs of downsizing, but the medium term level of adjustment. If there has already been significant adjustment and downsizing in recent years, and the sector is competitive, then there may be no downsizing forecast, and this will be zero. If however there has been no adjustment in recent years, the enterprise operates in protected or monopoly markets, and may have been politically favored, then downsizing levels of 40 - 60% may not be unrealistic. Ex-gratia payments are the discretionary payments that are proposed to be made to workers - typically under voluntary departure terms. Estimate this cost on the basis of existing precedents in your country or sector. Where there are no country precedents, table 5.3 gives information on severance packages used elsewhere. Statutory benefits vary considerably. Table 5.1 gives information for some selected countries. Estimate this cost on the basis of the relevant nationa legislation and regulations. Enter the amount as a percentage of the ex-gratia (e.g. if ex gratia is 100 currency units, and the statuory benefits will be 40 currency units, enter 40% in this box). Utilities which have been consistently loss-making may have significant arrears. There may be arrears of: salaries, pension fund payments (employees and employers contributions, health insurance and other wstatutory payments)
Assume:
Low arrears - add % 5% to costs
High arrears - add 15% to costs

Number of employees in selected SOEs

Indicative level of downsizing	%	INFO

Estimated numbers of redundant workers =

Cost of ex-gratia per employee	Currency units	INFO

Estimated total cost per worker =	Currency units

Costs of Other Statutory Benefits per Employee	%	INFO

Any arrears of salary / pension	%	INFO

Estimated total cost of severance =	Currency units

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Quick Cost Calculator

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Quick Cost Calculator