Employee Retention

Employers are devising strategies to retain employees because of the high cost of losing them. Companies lose an average of $1 million for every 10 professional and managerial employees who leave (Fitz-Enz, 1997, p. 1). This estimate is based on an analysis of potential customer retention costs, marketing and sales spending to attract new customers, and employee-based costs. Customer retention costs must be factored in because customers who become irritated with the annoyance of dealing with inexperienced front-line personnel simply take their business elsewhere: "It takes a new sales person two to three years to reach the same level of sales as the worker's predecessor" (Fitz-Enz, 1997, p. 1). Customers lost because of dissatisfaction over service must be replaced or the company loses market share. Losing employees and finding new ones represents a substantial cost to the organization. Factors include the processing and interviewing costs o

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or her dismissal, but with workers in such high demand, a policy of continuous employment makes good economic sense. Of Fortune magazine's top 100 best companies to work for in America, 18 explicitly have no-layoff policies. Such companies include Amgen, FedEx, and Southwest Airlines. The question is, what do companies who have no-layoff policies do with surplus employees during economic downturns? Some companies cross-train their employees or put them to work on internal projects such as examining customer-satisfaction reports. One company, Custom Business Forms, has its employees work on plant maintenance, repair, and general cleaning. The company's CEO describes the sense of employee ownership that results, "They take pride in the plant. If a newer employee writes something on the wall, another employee will clean it up . . . because it's their wall" (Meyer, 1997, p. 4). A no-layoff policy encourages high employee morale. The employees realize that the company has gone to bat for them in trying to keep their jobs; this gives the company a distinct competitive advantage in retaining employees. A no-layoff policy is especially advantageous for smaller companies who are unable to compete with the pay and benefits pac
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Approximate Word count = 2684
Approximate Pages = 11 (250 words per page)

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