Improve Profitable "ROE" with Retention

Written by Phil McCutchen

"R.O.E.: Return On Employee -- A measure of corporate business performance as determined byrepparttar gross revenue achieved per staff employee."

by Phil McCutchen Marketing Manager, VCG, Inc.

Asrepparttar 138167 definition above points out, ROE (Return On Employee) focuses on your staff,repparttar 138168 people who generaterepparttar 138169 revenue that makes your operation profitable. For any business with above-average employee turnover, ROE is a critical component of success that is too often neglected by management. Forrepparttar 138170 purposes of this article, we'll focus onrepparttar 138171 staffing industry; temporary employment and recruiting agencies that provide important personnel-related services torepparttar 138172 business community, yet typically suffer from above-average staff employee turnover. We will show yourepparttar 138173 challenges and offer some tips and techniques to improverepparttar 138174 turnover situation and thus, ROE. In our analysis of available operational data,repparttar 138175 average ROE for commercial staffing firms is a bit under $400,000. We've also seen some firms (many of them VCG staffing software clients) with ROE's that exceed that by 50% or more. Why do some staffing and recruiting firms settle for average or less, while others excel? One key to success is staff employee retention. According to data fromrepparttar 138176 ASA 2002 Staffing Industry Compensation Survey by Mercer Human Resource Consulting Inc.,repparttar 138177 average annual turnover for staffing industry jobs was 48 percent. In fact, in previous years, turnover was as high as 70% for some positions. As might be expected,repparttar 138178 impact of such high staff turnover -- for whatever reasons -- can be tremendous. One case study in "Continuity Management" by Hamilton Beazley, chairman of Strategic Leadership Group, an Arlington, VA-based consulting firm, pointed outrepparttar 138179 potential cost with this true story. A large company delayed a major product launch by nine months as it struggled to resolve a technical issue. The delay allowed a competitor to introduce a similar product first, gaining a competitive advantage among customers. As a result,repparttar 138180 firm's product never reached its projected volume and revenue potential. In investigatingrepparttar 138181 launch, it was discovered thatrepparttar 138182 solution torepparttar 138183 technical issue that causedrepparttar 138184 delay already existed asrepparttar 138185 firm's intellectual property based on research that had been done 15 years earlier! Knowledge of that research was lost due to staff turnover. Total cost torepparttar 138186 firm in duplicated research and lost revenue was $1 billion. Similar losses happen on smaller scales every day, and that includes your staffing firm -- all because 'head knowledge' was lost. Such quantifiable losses however, are justrepparttar 138187 most easily quantifiable part ofrepparttar 138188 problem. Amongrepparttar 138189 more obvious issues of turnover are: •Loss of morale among remaining staff members, leading to reduced productivity •Increased 'Ghost Work', i.e., remaining staff taking onrepparttar 138190 burdens and tasks of departed staff, which can also be stressful and demoralizing •Loss of revenue directly or indirectly attributable torepparttar 138191 loss of staff •Cost burden related torepparttar 138192 recruiting and training of replacement staff •Loss of tacit 'head knowledge' and experience. According torepparttar 138193 Boston-based Delphi Group, tacit knowledge represents some 70% of an employee's knowledge base. It includes knowledge about those they consult and discuss business with, company culture and operations experience, and unique experiences inrepparttar 138194 business that lead to innovation Planning An Employee Retention Program Recognizing that employee retention is important is easy enough. Doing something effective about it requires both strategic thinking and smart tactics, especially for staffing firms. Temporary staffing and recruiting firms may justifiably pride themselves on their intimate knowledge of human relationship management, but may also expend much of their efforts on clients and temporary or contract employees instead of their own staff. Changing that focus will change your business and its productive profitability big time. Let's start withrepparttar 138195 strategic planning factors: •First, be aware that employee needs differ from management's. They typically don't have 'ownership', and so their motivations are markedly at odds with what management believes they want. According to a number of surveys done overrepparttar 138196 past 50-plus years,repparttar 138197 top ten things employees want vs. what managers 'think' they want are: Top 10 Things Employees Want vs. What Managers 'Think' They Want FACTORSMANAGERSEMPLOYEES Full Appreciation for Work Done81 Feeling 'In' on Things102 Sympathetic Help on Personal Problems93 Job Security24 Good Wages15 Interesting Work56 Promotion/Growth Opportunities37 Personal Loyalty to Workers68 Good Working Conditions49 Tactful Disciplining710 Sources: Foreman Facts, Labor Relations Institute of NY (1946); Lawrence Lindahl, Personnel Magazine (1949). Repeated with similar results: Ken Kovach (1980); Valerie Wilson, Achievers International (1988), Bob Nelson, Blanchard Training & Development (1991), Sheryl & Don Grimme, GHR Training Solutions (1997-2001) •Second, acknowledge that employee retention is great for business. A recent survey conducted byrepparttar 138198 Gallup organization researchedrepparttar 138199 Impact of Employee Attitudes on Business Outcomes. They found that organizations where employees have above average attitudes toward their work (that is, high employee satisfaction), have: o38% higher customer satisfaction scores, o22% higher productivity, and

It Can Happen To You

Written by Jane Langdon

The dot com business is alive and well for those wanting to pursue it. What if you don’t know how to use a computer? Can anyone have twenty successful businesses onrepparttar internet in four years? Six years ago Jane Langdon did not know how to turn on a computer. Today she has twenty successful internet businesses. You can too.

It all started because her favorite perfume was discontinued. Jane started to study chemistry and learnrepparttar 138041 internet so she could read everything written about perfumery. She bought a computer and taught herself how to use it. Finally she mixed a perfume. People began to ask her what she was wearing. So she started an internet business, House of Rose, with one rose perfume. Today she has more than 55 long lasting, non alcohol perfumes at

She then had a copy of a Chanel suit made by a seamstress for a trade show in New York City. So many people wanted to know where she got it, so she started her second business, Sew Beautiful By Natasha and Jane. They make custom couture suits, dresses, evening gowns, pageant and bridal attire at

The now famous poncho that Martha Stewart wore upon her release from Camp Cupcake can now be yours. Made for her as a going away gift from a fellow inmate, it has become known asrepparttar 138042 “Welcome Back” poncho. The woman who maderepparttar 138043 poncho, Xiomaro Hernandez, will get 10% ofrepparttar 138044 profits after her release from Alderson in 2008. The site is

Want to browse unique fashion items onrepparttar 138045 internet? . A Passion for Fashion has lovely charms, blouses, shoes, handbags and more for sale. Each monthrepparttar 138046 items change so you will always berepparttar 138047 informed ofrepparttar 138048 newest delights at

Soon some of her friends asked her to help them put up an internet site because they liked her businesses and wanted to start their own. After she helped them, she decided to offer her services to others and started Your Net Store

Her sister-in-law has Parkinson’s Disease and her biggest problem was taking her medications on time. She askedrepparttar 138049 doctor if there was a system to help her sister-in-law and he said no, but would gladly welcome one. Pill Proof at solvedrepparttar 138050 problem of medication compliance.

Jane had met her husband ten years ago through a personnel dating service and always felt they could be improved on. Friends said she had good advice about how to approach this new way to meet people. She decided to start a very selective marriage service that included questions to 101 important elements for a good match. See Hopeful Romantic at

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