Top Talent Attracted to Socially Responsible Companies
Talents are key to success in today’s business. How much would a company pay to lower staff turnover rate by 12%? Best Employers in Canada winner LoyaltyOne achieved this through going green. I talked to Chief Sustainability Officer Debbie Baxter to see how embedding sustainability into their corporate culture changes the company.
LoyaltyOne operates the popular Air Miles reward program that is used by approximately two-thirds of Canadian households. In 2009, they created a new C-level position, Chief Sustainability Officer. Since then, LoyaltyOne has been accumulating top industry awards , including the coveted Best Employers in Canada presented by The Globe And Mail Report On Business. Other accolades include Green Toronto Awards (City of Toronto), The Green 30, Canada’s Greenest Employers, and Living City Award for Sustainable Communities Leadership.
Internally, staff turnover rate and employee engagement have dramatically improved. According to the company’s accountability report ( PDF ), staff turnover rate dropped from 23% in 2008 to 11% in 2009, an improvement of 12%. Associate engagement score improved from 79% to 85%. This measures the extent to which “associates are committed, motivated and actively involved in helping the company be successful.” In 2009, 85% of associates said they would “recommend LoyaltyOne as one of the best places to work”, up 6% from 2008. Leader of Hewitt’s Best Employers in Canada study Neil Crawford says “LoyaltyOne has done an excellent job of attracting, retaining and engaging people with a shared passion and excitement for the work they do.”
In other words, LoyaltyOne is retaining talents much more effectively and staff finds it a great place to work. How much would HR pay for a 12% reduction in turnover? MIT Sloan Management estimates each employee’s turnover costs a company up to 150% of the employee’s remuneration package (see Breaking the Cycle of Failure in Services ). For a company of 100 staff, for example, the savings could reach over a million. This is no small change.
While LoyaltyOne’s dramatic retention improvement may not be totally attributable to their sustainability initiatives, there is a good case to be made that sustainability brings in real and substantial return on investment .
Cost Of Turnover - News
How much would HR pay for a 12% reduction in turnover? MIT Sloan Management estimates each employee's turnover costs a company up to 150% of the employee's remuneration package (see Breaking the Cycle of Failure in Services). For a company of 100 staff
Bangchak President Dr Anusorn Sangnimnuan said the company's turnover in the third quarter was in a satisfactory level while its profit had decreased due to the lower refining cost. The cost stood at 5.50 US dollars per barrel, dwindling from 9 US
DIVERSIFIED group Argent Industrial says it produced satisfactory results for the year to March, despite substantial involvement in the steel and automotive sectors, and subsequent restructuring costs. The company says higher group turnover of R1,75bn
Parent company Dart Group, based at Leeds-Bradford International Airport, lifted turnover to £543 million in the year to March 31 compared with £435 million the previous year. Pre-tax profits increased from £22.2 million to £26.2 million.
The course is offered to owners of companies with a turnover of at least $2 million. BNZ has committed $750000, which will reduce the cost of the course from $20000 to $15000. Eligible businesses working with an NZTE regional business partner can also
The True Cost of Employee Turnover | Lendio
When speaking to a SHRM chapter recently I was shocked that only 30% of the audience was even tracking their turnover.
If you are NOT tracking your employee turnover, how are you going to get a start on reducing it? If you are not serious about tracking it, don’t start activities to reduce your turnover. The time and money you spend will probably be wasted because it will not have the targeted focus to drive down your numbers.
Turnover Costs by the NumbersI have seen countless formulas and studies to determine the cost of turnover in an organization. Everything I have seen indicates that the best measure is roughly three months of salary for every person who leaves. I have also seen a formula that the cost of turnover for:
Entry level employees is 30-50% of annual salary Mid-level employees is 150% of annual salary High-level employees as high as 400% of salarySome people might say these numbers are overstated, but think about the cost of a middle level manager who walks out the door, and a key deadline is missed because no one can fill their shoes, or a major opportunity is not capitalized on.
A third formula I have seen calculates that the cost of turnover is 25% of the annual salary. Those numbers can be staggering if you are running at 10% turnover. Imagine the bottom line impact if you could cut turnover in half, to 5%. The savings are huge even when looking at lower level employees.
I used to see this when software developers would leave an organization I was with. We could calculate how much a delayed product roll-out would cost us, and the numbers were mind boggling . This is particularly the case when talking about knowledge-based businesses. All your resources walk on two feet and when that person walks out the door on you, so does their knowledge.
Stick With Your TargetRegardless of what number you pick as a target or the formula to calculate the cost of turnover; stick with it. Don’t start adjusting your measures so you start to feel good about where you are going. If you do that, you will not feel good as you see profits start to deteriorate. When that happens, you will see your good people start to jump ship because they realize you aren’t addressing the problem and that you are in denial. Once turnover starts to accelerate, it is very hard to slow it down much less put a stop to it.
The Good, The Bad and The NeutralI recommend you classify your turnover as “good,” “bad” or “neutral” turnover. Some turnover is good. Yes, that’s what I said! There are times when you have to fire people or permanently reduce your workforce. That’s reality. If you want to take that into account when calculating your turnover by all means do so. Just don’t play games with the numbers to make yourself feel good about your lousy turnover. Whatever you choose, use the same measurement over time.
Cost of Employee Turnover --> Salary + 30%. Wow. 
Turns out you can save gobs of money when you don't turnover your employees so much - no, duh! 
The True Cost of Employee Turnover 
The cost of turnover for a professional level position is $32,500 from 
RT : The True Cost of Employee Turnover And How You Should Measure It Guest post by
Cost Of Turnover - Bookshelf
Annals of the American Academy of Political and Social Science
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