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Happy Employees = Happy Customers

How to hire, train and retain to increase profitability

(page 3 of 3)

Kaita says that, in 2007, the staff surpassed its revenue goal, so management took everyone to Las Vegas for a three-day, two-night stay at the MGM Grand Hotel. About 65 employees went and got free T-shirts, small spending stipends and fun ProService luggage tags. But Kaita stresses that it’s the little things that matter most to employees. “The best way to retain the good ones is to show appreciation, thank them for their hard work and help them grow and develop,” she says. “Employers lose employees all the time because another company offers them more money or they find another position that suits them better, but you don’t want to lose a great employee who is a real asset to the company because you, as a manager, didn’t do enough to let that person know how valuable they were to the organization. You absolutely have to work hard to keep the superstars, but it’s worth it.”



The average employee turnover rate for Hawaii companies is 21 percent a year, according to Debbie Padello, of Altres HR. While some turnover is normal and healthy, high turnover can cripple a company’s productivity and even force it out of business. Padello says turnover costs vary depending on the position and industry but estimates it can range from 25 percent of an employee’s annual compensation, for a minimum-wage worker, to 400 percent for a top executive. To calculate the true cost of turnover, consider the costs of:

+ Recruitment advertising and services
+ Screening and interviewing
+ Background checks and drug testing
+ Training for new employees
+ Equipment, supplies and uniforms
+ Administrative burden of orienting a new hire
+ Overtime pay for other workers
+ Increase in unemployment insurance

Consider also the loss of productivity due to: an empty position, co-workers covering for missing employee, decrease in morale, training a new worker, time it takes for new hire to get up to speed, customer complaints

Other potential costs: loss of competitive information and trade secrets, negative word-of-mouth publicity about your organization


The Society of Human Resources Management introduced a program in 2006 called People Equity to increase retention. Olsten Staffing’s Signe Godfrey, the 2008 president of SHRM Hawaii, says, “SHRM recognized that retention was critical to the survival of companies in Hawaii because, at that time, we all were facing a workforce shortage that looked bleak.” There is no shortage today, but Godfrey says Hawaii will face one again when the economy rebounds.

The People Equity program highlighted the three top factors in optimal corporate performance:

Alignment: Employees clearly understand the company’s products, services and mission to help the company succeed.

Capability: They have the tools and resources to do the job effectively.

Engagement: They are engaged, love what they do, enjoy coworkers and want to help the company succeed. They feel they are contributing to the company’s overall success.

According to Godfrey, surveys showed that when companies meet these three conditions, they were more likely to be productive and profitable.



Hawaii Business magazine invites you to comment on our articles and the issues they raise. Comments are moderated for offensive language, commercial messages and off-topic posts and may be deleted. Some comments may be chosen for inclusion in the magazine on the Feedback page.

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Apr 9, 2009 06:52 pm
 Posted by  crafty808

I absolutely LOVED this article! I hope MANY business read this and apply the useful tips these ladies had to offer.

Workplace morale is important. I don't think a lot of companies consider this to be of importance. They quickly blame the employee for bad morale. This is why I think more companies SHOULD survey their employees and then FOLLOW UP. How do you fix it if you don't know it's broken?

Why don't ALL companies participate in the Best Places to Work Survey?

Apr 16, 2009 07:12 pm
 Posted by  BrownTurtle

Great article. From my experience, the hallmark of a good company is measured by the turnover rate - plain and simple. The turnover rate is the most obvious way to know if the management cares about its employees and not just the bottom line.

I would recommend that job seekers stay away from local companies that are constantly advertising their job openings for the same positions all the time. There is a reason why people don't stick around.

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