Miracle Hospital is a 500-bed hospital located in Denver, Colorado. It employs 4,000 employees. Of these 4,000 employees, 1,500 are nursing staff.

Five years ago, the hospital experienced a sudden increase in patient volume. Although the increase brought in additional revenue, the additional workload began having negative effects on employees. An employee survey found that more than 50% of the workforce reported experiencing moderate to high levels of stress as a direct result of difficulties in trying to balance work and family life.

Two years ago, the hospital experienced its highest absenteeism rate with an average of 10 sick days taken per employee per year. This resulted in lost productivity and decreased employee satisfaction. The average hourly rate of employees at the hospital is $25.00 per hour. Employee benefits account for an additional 30% of salary.

Last year, Miracle Hospital not only experienced higher absenteeism, but its turnover rate had nearly doubled. At the end of the year, Miracle Hospital experienced 800 separations, 650 of which were considered avoidable. The nursing division experienced the highest turnover with 350 separations.

As a result of competition for skilled workers in an aging workforce and a shrinking labor pool, management was experiencing difficulties not only with retaining skilled workers but also with recruiting skilled workers. Employee turnover was having a negative impact on workplace morale, bringing employee satisfaction and productivity down to an all-time low. Miracle Hospital was compelled to address the issue quickly.

As the Director of Human Resources, the hospital CEO has asked you to calculate the hospital turnover and absenteeism rate and come up with some solutions to fix the problem.

**Question:**

What is the total COST of absenteeism at Miracle Hospital? (Do not include costs of incidental or supervisory costs in your calculation.)

A. $10,400,000
B. $25,000,000
C. $3,000,000
D. $14,700,000