How to Save $57,000 in HR Costs

The Cost of Losing Employees

Losing employees is expensive for your company. This is not a new revelation. Rather, it is a harsh reality that human resource professionals live with daily.

A recent study* underscored the importance of this fact by determining the value and the amount of money lost when employees of various seniorities leave your company in search of new opportunities.

Quantifying The Loss of an Employee:

$7,000 – Cost of replacing a salaried employee

+ $10,000 – Cost of replacing a mid-level employee

+ $40,000 – Cost of replacing a senior executive

$57,000 – Total Cost of losing one employee from each seniority level

How to Increase Employee Retention

When you put it into financial terms, you can save your organization $57,000 a year by retaining one salaried employee, one mid-level employee, and one senior executive. The most effective way to achieve these savings is to make an investment in employee incentive and employee recognition programs.

Implementing a program that allows you to foster higher levels of employee engagement and recognition can be a key to your success. In addition to adequately supporting an employee’s need for growth and stimulating work, rewards and incentives for high performance are excellent ways to increase employee retention. Non-cash incentives have been shown time and time again to be more cost effective and more memorable drivers of engagement than cash bonuses.

Non-cash rewards can include:

Incurring losses of $7,000, $10,000, and $40,000 every time an employee departs is simply too costly. It’s time to get proactive and make small investments in incentive programs. Your dividends in terms of reduced training costs and increased productivity will far exceed the expenses of the program.

For more information on how to retain your employees utilizing cost-effective incentives, rewards and recognition programs, please click here or send me an email at bcoriaty@jnrcorp.com to discuss further.

*Source: Recruiting Times, U.S. Department of Labor, PricewaterhouseCoopers/Saratoga, Bureau of Labor Statistics

Take It from Those Who Know Best: Non-Cash Rewards Drive Sales Performance

 

Often times, the most effective way to improve your organization is to take a cue from those who are currently excelling in your industry. Organizations that exhibit superior performance have thrived for a reason, and not learning from their experiences would represent a major oversight. The Incentive Research Foundation (IRF) recently published a study conducted by the Aberdeen Group that evaluates non-cash incentives and rewards based on their utilization by “Best-In-Class” companies.

Best-In-Class companies were categorized as the top 20% of firms, and had “higher customer retention rates, higher year-over-year increases in the number of sales reps achieving sales quota” among other superior qualities. A majority of these organizations cited non-cash incentives and rewards as a “vital component” of sales performance management.

The key findings:

  • Incentive Travel is Essential: 100% of Best-In-Class organizations utilize Incentive Travel to motivate their sales force
  • Internal Sales Employee Recognition Programs Produce Results: 14.8% higher team quota attainment and 5.9% higher customer renewal rate was achieved by organizations with formal internal sales employee recognition programs
  • Company Sponsored Events Are Vital: Best-In-Class firms were 75% more likely to offer company sponsored events as incentives
  • Outsourcing Program Management Leads to Improved Sales Figures: Companies that outsource the management of non-cash incentive programs show higher lead conversion rates (30.4% vs. 23.9%) and lower average sales cycles (4.2 months vs. 5.3 months)

Best-In-Class firms are effectively utilizing and outsourcing the management of their non-cash incentive programs to further the success of their organizations. It is crucial to take a cue from the superior performers, and not fall in line with the laggards or industry average businesses.

Finding a company to manage your incentive program is a crucial decision that is vital to the success of your program. Visit our website at http://www.jnrcorp.com today and let us prove to you that we are the company that will provide results for you.

Kristopher Hewkin

Source: The Incentive Research Foundation “Press Release: ‘Best-In-Class’ Firms Prefer Non-Cash Rewards to Drive Sales Performance”