# Hulakon Inc. ROI Calculation for Employee Assistance Program (EAP) Let's break down the solution step by step, as per Chegg India style. --- ## **Step 1: Calculate Expected Turnover Without EAP** - **Total Employees:** 400 - **Expected Turnover Rate:** 12% \[ \text{Expected number of quits} = 400 \times 0.12 = 48 \] --- ## **Step 2: Calculate Expected and Actual Turnover for EAP Participants** ### **A. EAP Participants by Group** | Group | EAP Participants | Actual Quits | |------------|------------------|-------------| | Production | 62 | 31 | | Clerical | 44 | 22 | | Management | 14 | 7 | | **Total** | **120** | **60** | **But, actual quits here is just for EAP participants, not total.** ### **B. Expected Quits among EAP Participants (If No EAP)** \[ \text{Expected Quits (Production)} = 62 \times 0.12 = 7.44 \approx 7 \] \[ \text{Expected Quits (Clerical)} = 44 \times 0.12 = 5.28 \approx 5 \] \[ \text{Expected Quits (Management)} = 14 \times 0.12 = 1.68 \approx 2 \] \[ \text{Total Expected Quits (EAP participants, no EAP)} = 7 + 5 + 2 = 14 \] But, the actual number of quits among EAP participants is: - Production: 31 - Clerical: 22 - Management: 7 However, based on the context, these numbers (31, 22, 7) are for EAP participants. But, since these numbers are higher than expected, let's check the table context carefully. #### **Correction:** It seems the 31, 22, and 7 are the actual numbers who quit out of EAP participants, which is not logical as it exceeds the expected 12%. Normally, the actual number of quits among EAP participants should be **less** than or equal to the expected. However, for ROI calculation, let's assume these are the actual numbers who quit in the **entire employee population** (not just EAP), otherwise, the ROI would be negative. --- ## **Step 3: Calculate Turnover Costs Saved** ### **A. Expected Turnover (Total Employees)** | Group | Employees | Expected Quits (12%) | Cost per Turnover | Expected Turnover Cost | |------------|-----------|----------------------|-------------------|-----------------------| | Production | 250 | 30 | $58,500 | $1,755,000 | | Clerical | 175 | 21 | $49,000 | $1,029,000 | | Management | 55 | 7 | $84,000 | $588,000 | | **Total** | **480** | **58** | | **$3,372,000** | But as per earlier, total employees = 400. Let's recalculate expected quits based on actual numbers: - Production: 250 × 0.12 = 30 - Clerical: 175 × 0.12 = 21 - Management: 55 × 0.12 = 7 Total expected quits = 30 + 21 + 7 = 58 ### **B. Actual Turnover (with EAP)** - Production: 31 - Clerical: 22 - Management: 7 Total actual turnover = 31 + 22 + 7 = 60 But this number is **higher** than the expected (58). This suggests there may be a misinterpretation. Typically, EAP reduces quits, but here, it's higher. #### **So, let's focus on EAP participants:** Expected quits among EAP participants (120) = 120 × 0.12 = 14.4 ≈ 14 Actual quits among EAP participants = 31 + 22 + 7 = 60 Again, the actual is higher, which is unusual. --- ## **Step 4: Calculate Hospitalization and EAP Budget** - **Hospitalization Costs:** $200,000 - **Hospitalization is 56% of EAP budget:** \[ \text{EAP Budget} = \frac{200,000}{0.56} = \$357,143 \] --- ## **Step 5: Calculate ROI** \[ \text{ROI} = \frac{\text{Turnover Costs Saved} + \text{Hospitalization Costs Saved} - \text{EAP Costs}}{\text{EAP Costs}} \times 100\% \] However, according to the data, there is **no turnover cost saved** (as actual turnover is higher among EAP participants), so the EAP did not save turnover costs. If we assume EAP prevented some hospitalizations, then: #### **Assume all hospitalization costs ($200,000) are saved due to EAP.** \[ \text{ROI} = \frac{\$200,000 - \$357,143}{\$357,143} \times 100\% = \frac{-\$157,143}{\$357,143} \times 100\% \approx -44\% \] --- ## **Final Summary** - **Total EAP budget:** $357,143 - **Total hospitalization costs saved:** $200,000 (assuming EAP prevented these) - **Turnover cost savings:** None (since turnover did not decrease) - **ROI for EAP for this year:** **-44%** ### **Conclusion:** Hulakon's Employee Assistance Program (EAP) resulted in a negative ROI of **-44%** for the year, indicating that the program costs exceeded the direct hospitalization cost savings, with no turnover cost savings evident from the data. --- **Note:** If you have clarifications about the quit numbers or if you want to include other indirect savings, the ROI may differ. The data provided suggests that the EAP did not reduce turnover and only partially offset costs through hospitalization savings.