Employee retention is smart cash flow strategy

Retaining good employees is a smart way to manage cash flow.

A quality retention program reduces expenses and keeps productivity high, says Jeff Stinson, president of Irvine, California-based Global Human Resources Outsourcing (GHRO).

He mentioned a GHRO client with 1,000 employees discovered that every 1 percent drop in turnover saved nearly $ 188,000 annually.

Stinson says one employee departure causes a drop in productivity, takes up the supervisor's time, creates a need to pay out unused vacation time and then creates costs related to the hiring for an open position.

He says an employee retention program should have the following:

• New hire orientation


• Strong performance management systems


• Up to date and fair employee policies


• Fair compensation and benefit programs


• Employee opinion surveys


• Quality supervisor/management training program

Stinson says a human resources audit can provide the framework for developing a strong employee retention program.