Every business that issues laptops to its staff needs a replacement cycle budget to upgrade or replace these computers over time. Small businesses naturally try to keep these budgets as low as possible, but they must keep in mind the productivity cost of an out-of-date laptop infrastructure, as employee costs rapidly exceed equipment expense if their time is lost.

Measuring Laptop Cost

Laptop purchases can be a major expense for any small business. Depending on what they're needed for, the right laptop for an employee can cost $1,000 or more. However, the cost of an idled employee can be even higher: include the cost of benefits, office space, and other fixed costs, and a salaried employee's time can cost a business more than $50 per hour even if his paycheck is much smaller. If outdated hardware delays an employee by 20 hours, a too-frugal management policy can spend more than the cost of a new laptop on an employee twiddling her thumbs. 20 hours per year is only three minutes per workday; over a three-year period, 20 hours are lost if only 80 seconds per day are wasted.

Obsolescence and Hardware Improvements

The rapid increase in hardware quality over time argues in favor of an aggressive laptop replacement policy. Year-over-year improvements in laptops will generally make next year's model 20 percent to 30 percent faster than current models, which reduces the productivity lost to slower hardware. This is a negligible concern for employees who use their laptops primarily for email and written documents, but employees who work with spreadsheets or presentations will sometimes max out the hardware's capabilities. Giving those employees better hardware on a quicker cycle lowers the risk of time lost to a computer bottleneck.

Staff-Sensitive Upgrades

Upgrade decisions become more complicated due to software and operating system concerns. New laptops usually come with the most recent versions of Windows and Mac OS X; in most cases, the employee will stop losing time due to slow hardware but might have to spend time learning how to use the new operating system. This problem is exacerbated if the applications themselves are also upgraded. The best way to resolve this problem is to evaluate the staffer and his laptop needs. Nontechnical staff face the largest learning curve and have the lowest needs for faster hardware; upgrade their laptops less often. Technical staff adapt more quickly and need more out of their laptops; upgrade their hardware aggressively.

Replacement Time Periods

Many businesses have a de facto "use it until it breaks" policy, which can force an employee to use the same hardware for five years or more. Over this period of time, it's nearly certain that this employee will start losing productivity waiting for his laptop to catch up; this is especially the case if IT staff does not maintain older laptops to make sure their performance doesn't degrade over time. A mandatory minimum replacement policy of three years will amortize annual laptop replacement expenses, provide recent hardware for all employees and generally ensure that lost employee time is kept to a minimum. However, employees should have the option of requesting better hardware on a shorter cycle because the cost of their lost time can be so high.