ECONOMIC VALUE OF EXAMINATIONS 219
fraction of the salary of the executive who has to give time
to this correspondence.
Traveling expenses. This item may be either the travel-
ing expenses of the applicant to the place of employment or
of the interviewer or scout to the place of residence of the
applicant.
Salaries of interviewers and of other workers in the em-
ployment department. Some consideration should also be
given to the cost of the time devoted by the foreman and
other executives to interviewing men.
Office overhead. This includes rent, telephone, light, heat,
janitor service, and other overhead for office space and
equipment in comparison with what would be demanded
after adoption of the new measurement methods.
The major economies, the savings in the plant or office,
remain to be estimated. Even though it be found that the
new methods cost more to administer than the old, their net
economic value may be very large. These savings will be
found by estimating the relative cost of the one or more
items which have served as criteria for evaluating the exam-
inations. The firm may already have computed the cost of
its labor turnover in the departments affected by the investi-
gation. If so, these figures will be useful in estimating the
dollar value of the new selection methods. In any event, the
following sources of economies should be scrutinized.
Cost of training. This includes salary of instructors and
supervisors, cost of materials used in training, office over-
head, and chiefly campensation to the employee for unpro-
ductive time during training. On jobs where there is heavy
investment in machines or where the cost of power to oper-
ate the machines is high, the appropriate charge against cost
of training new workers may be several times the wages.
Cost of spoilage. A high turnover means that a large per-
centage of employees are new and inefficient. This fre-