Employee Retention of Colgate-Palmolive : Colgate-Palmolive Company (NYSE: CL) is an American diversified multinational corporation focused on the production, distribution and provision of household, health care and personal products, such as soaps, detergents, and oral hygiene products (including toothpaste and toothbrushes). Under its "Hill's" brand, it is also a manufacturer of veterinary products. The company's corporate offices are on Park Avenue in Midtown Manhattan, New York City.
Depending on which economist you believe or which paper you read, the recession is not over or very close to being over or we are headed for a “double-dip”.
One report I read this morning used the words “very dismal’ when a noted New York University professor spoke to a group of financial leaders yesterday in Switzerland describing the US economy. In another report, the words “roaring back” were used to describe US exports. However, the National Bureau of Economic Research, the official arbitrator of economic growth and recession has not yet declared an end to the current downturn.
Even in the worst economies, retention of an organization’s “key” talent is essential to being able to maintain and grow the business. While it may seen counter intuitive to talk about growth during a recession, remember that even in an economic downturn, there are organizations that thrive. A Saratoga County, New York business has seen growth in its pet food specificity store as pet owners are willing to spend on their household pets even during a recession. Community colleges and other schools are reporting record enrollments as out of work employees return to school to retrain or beef up their knowledge and skills.
A recently released Conference Board report indicated that less than half of all US workers are satisfied with their jobs. The survey of 5,000 households found that only 45% were satisfied with their jobs. The report concluded that employee retention would suffer as 25% of the respondents expect to change jobs within a year. Studies by the Saratoga Institute (PricewaterhouseCoopers) indicate turnover costs organizations from 12% to 40% of pretax income, no insignificant amount even at half that value. Therefore, it is no wonder that more and more organizations are rethinking their employee retention strategies.
The time to develop retention strategies is not after the organization’s top talent is walking out the door going to the competitor down the street. Visionary employers like Monsanto and others (SAS, Edward Jones, Google, DreamWorks Animation SKG, Qualcomm, Cisco, Whole Foods Market, Goldman Sachs Group, Novo Nordisk, Scottrade, Quicken Loans, Alston & Bird, Aflac, Adobe Systems, Ernst & Young, Microsoft, Mayo Clinic, CarMax, Men's Wearhouse, Deloitte, PricewaterhouseCoopers, American Express, Children's Healthcare of Atlanta, Mattel, Marriott International, S C Johnson & Son, Arkansas Children's Hospital, Publix Super Markets, KPMG, General Mills, FedEx, Gilbane, Intel, Winchester Hospital, Colgate-Palmolive), to mention a few, have active employee retention programs designed to keep their best performers. These organizations and others recognize the need to retain the talent needed to sustain and grow their business, even in the best of times and the worst of times. It is also no surprise that many of the above are also in the top companies to work for as determined by Forbes and other publishers.
Employee retention is a process in which the employees are encouraged to remain with the organizationfor the maximum period of time or until the completion of the project. Employee retention is beneficialfor the organization as well as the employee. Employees today are different. They are not the ones whodont have good opportunities in hand. As soon as they feel dissatisfied with the current employer orthe job, they switch over to the next job. It is the responsibility of the employer to retain their bestemployees. If they dont, they would be left with no good employees. A good employer should knowhow to attract and retain its employees.Most employees feel that they are worth more than they are actually paid. There is a natural disparitybetween what people think they should be paid and what organizations spend in compensation. Whenthe difference becomes too great and another opportunity occurs, turnover can result. Pay is defined asthe wages, salary, or compensation given to an employee in exchange for services the employeeperforms for the organization. Pay is more than "dollars and cents;" it also acknowledges the worth andvalue of the human contribution. What people are paid has been shown to have a clear, reliable impacton turnover in numerous studies. Employees comprise the most vital assets of the company. In a workplace where employees are not able to use their full potential and not heard and valued, they are likelyto leave because of stress and frustration. In a transparent environment while employees get a sense of achievement and belongingness from a healthy work environment, the company is benefited with astronger, reliable work-force harboring bright new ideas for its growth.
Employee turnover is one of the largest though widely unknown costs an organization faces. Whilecompanies routinely keep track of various costs such as supplies and payroll, few take into considerationhow much employee turnover will cost them: Ernst & Young estimates it costs approximately $120,000to replace 10 professionals. According to research done by Sibson & Company, to recoup the cost of losing just one employee a fast food restaurant must sell 7,613 combo meals at $2.50 each. Employeeturnover costs companies 30 to 50% of the annual salary of entry-level employees, 150% of middle-level
employees, and up to 400% for upper level, specialized employees. Now that so much is being done byorganizations to retain its employees, why is retention so important? Is it just to reduce the turnovercosts? Well, the answer is a definite no. Its not only the cost incurred by a company that emphasizes theneed of retaining employees but also the need to retain talented employees from getting poached.
Compensation constitutes the largest part of the employee retention process. The employees alwayshave high expectations regarding their compensation packages. Compensation packages vary fromindustry to industry. So an attractive compensation package plays a critical role in retaining theemployees. Compensation includes salary and wages, bonuses, benefits, prerequisites, stock options,bonuses, vacations, etc. While setting up the packages, the following components should be kept inmind:Salary and monthly wage: It is the biggest component of the compensation package. It is also the mostcommon factor of comparison among employees. It includesBasic wageHouse rent allowanceDearness allowanceCity compensatory allowanceSalary and wages represent the level of skill and experience an individual has. Time to time increase inthe salaries and wages of employees should be done. And this increase should be based on theemployees performance and his contribution to the organization. Bonus: Bonuses are usually given tothe employees at the end of the year or on a festival. Economic benefits: It includes paid holidays, leavetravel concession, etc.Long-term incentives: Long term incentives include stock options or stock grants.These incentives help retain employees in the organization's startup stage. Health insurance: Healthinsurance is a great benefit to the employees. It saves employees money as well as gives them a peaceof mind that they have somebody to take care of them in bad times. It also shows the employee that theorganization cares about the employee and its family. After retirement: It includes payments that anEmployee gets after he retires like EPF (Employee Provident Fund) etc. Miscellaneous compensation: Itmay include employee assistance programs (like psychological counseling, legal assistance etc),discounts on company products, use of a company cars, etc.
Work environment: It includes efficient managers, supportive co-workers, challenging work,involvement in decision-making, clarity of work and responsibilities, and recognition. Lack or absence of such environment pushes employees to look for new opportunities. The environment should be suchthat the employee feels connected to the organization in every respect. Growth and Career Growth anddevelopment are the integral part of every individuals career. If an employee can not foresee his pathof career development in his current organization, there are chances that hell leave the organization assoon as he gets an opportunity.The important factors in employee growth that an employee looks forhimself are:Work profile: The work profile on which the employee is working should be in sync with hiscapabilities. The profile should not be too low or too high.Personal growth and dreams: Employees responsibilities in the organization should help him achieve hispersonal goals also. Organizations can not keep aside the individual goals of employees and fosterorganizations goals. Employees priority is to work for themselves and later on comes the organization. If hes not satisfied with his growth, hell not be able to contribute in organization growth. Training anddevelopment: Employees should be trained and given chance to improve and enhance their skills. Manyemployers fear that if the employees are well rained, theyll leave the organization for better jobs.Organization should not limit the resources on which organizations success depends. These trainingscan be given to improve many skills like:Communications skillsTechnical skillsIn-house processes and procedures improvement related skills
C or customer satisfaction related skillsSpecial project related skillsNeed for such trainings can be recognized from individual performance reviews, individual meetings,employee satisfaction surveys and by being in constant touch with the employees.Importance of Relationship in Employee Retention ProgramSometimes the relationship with the management and the peers becomes the reason for an employeeto leave the organization. The management is sometimes not able to provide an employee a supportivework culture and environment in terms of personal or professional relationships. There are times whenan employee starts feeling bitterness towards the management or peers. This bitterness could be due tomany reasons. This decreases employees interest and he becomes de-motivated. It leads to lesssatisfaction and eventually attrition.A supportive work culture helps grow employee professionally and boosts employee satisfaction. Toenhance good professional relationships at work, the management should keep the following points inmind.
Depending on which economist you believe or which paper you read, the recession is not over or very close to being over or we are headed for a “double-dip”.
One report I read this morning used the words “very dismal’ when a noted New York University professor spoke to a group of financial leaders yesterday in Switzerland describing the US economy. In another report, the words “roaring back” were used to describe US exports. However, the National Bureau of Economic Research, the official arbitrator of economic growth and recession has not yet declared an end to the current downturn.
Even in the worst economies, retention of an organization’s “key” talent is essential to being able to maintain and grow the business. While it may seen counter intuitive to talk about growth during a recession, remember that even in an economic downturn, there are organizations that thrive. A Saratoga County, New York business has seen growth in its pet food specificity store as pet owners are willing to spend on their household pets even during a recession. Community colleges and other schools are reporting record enrollments as out of work employees return to school to retrain or beef up their knowledge and skills.
A recently released Conference Board report indicated that less than half of all US workers are satisfied with their jobs. The survey of 5,000 households found that only 45% were satisfied with their jobs. The report concluded that employee retention would suffer as 25% of the respondents expect to change jobs within a year. Studies by the Saratoga Institute (PricewaterhouseCoopers) indicate turnover costs organizations from 12% to 40% of pretax income, no insignificant amount even at half that value. Therefore, it is no wonder that more and more organizations are rethinking their employee retention strategies.
The time to develop retention strategies is not after the organization’s top talent is walking out the door going to the competitor down the street. Visionary employers like Monsanto and others (SAS, Edward Jones, Google, DreamWorks Animation SKG, Qualcomm, Cisco, Whole Foods Market, Goldman Sachs Group, Novo Nordisk, Scottrade, Quicken Loans, Alston & Bird, Aflac, Adobe Systems, Ernst & Young, Microsoft, Mayo Clinic, CarMax, Men's Wearhouse, Deloitte, PricewaterhouseCoopers, American Express, Children's Healthcare of Atlanta, Mattel, Marriott International, S C Johnson & Son, Arkansas Children's Hospital, Publix Super Markets, KPMG, General Mills, FedEx, Gilbane, Intel, Winchester Hospital, Colgate-Palmolive), to mention a few, have active employee retention programs designed to keep their best performers. These organizations and others recognize the need to retain the talent needed to sustain and grow their business, even in the best of times and the worst of times. It is also no surprise that many of the above are also in the top companies to work for as determined by Forbes and other publishers.
Employee retention is a process in which the employees are encouraged to remain with the organizationfor the maximum period of time or until the completion of the project. Employee retention is beneficialfor the organization as well as the employee. Employees today are different. They are not the ones whodont have good opportunities in hand. As soon as they feel dissatisfied with the current employer orthe job, they switch over to the next job. It is the responsibility of the employer to retain their bestemployees. If they dont, they would be left with no good employees. A good employer should knowhow to attract and retain its employees.Most employees feel that they are worth more than they are actually paid. There is a natural disparitybetween what people think they should be paid and what organizations spend in compensation. Whenthe difference becomes too great and another opportunity occurs, turnover can result. Pay is defined asthe wages, salary, or compensation given to an employee in exchange for services the employeeperforms for the organization. Pay is more than "dollars and cents;" it also acknowledges the worth andvalue of the human contribution. What people are paid has been shown to have a clear, reliable impacton turnover in numerous studies. Employees comprise the most vital assets of the company. In a workplace where employees are not able to use their full potential and not heard and valued, they are likelyto leave because of stress and frustration. In a transparent environment while employees get a sense of achievement and belongingness from a healthy work environment, the company is benefited with astronger, reliable work-force harboring bright new ideas for its growth.
Employee turnover is one of the largest though widely unknown costs an organization faces. Whilecompanies routinely keep track of various costs such as supplies and payroll, few take into considerationhow much employee turnover will cost them: Ernst & Young estimates it costs approximately $120,000to replace 10 professionals. According to research done by Sibson & Company, to recoup the cost of losing just one employee a fast food restaurant must sell 7,613 combo meals at $2.50 each. Employeeturnover costs companies 30 to 50% of the annual salary of entry-level employees, 150% of middle-level
employees, and up to 400% for upper level, specialized employees. Now that so much is being done byorganizations to retain its employees, why is retention so important? Is it just to reduce the turnovercosts? Well, the answer is a definite no. Its not only the cost incurred by a company that emphasizes theneed of retaining employees but also the need to retain talented employees from getting poached.
Compensation constitutes the largest part of the employee retention process. The employees alwayshave high expectations regarding their compensation packages. Compensation packages vary fromindustry to industry. So an attractive compensation package plays a critical role in retaining theemployees. Compensation includes salary and wages, bonuses, benefits, prerequisites, stock options,bonuses, vacations, etc. While setting up the packages, the following components should be kept inmind:Salary and monthly wage: It is the biggest component of the compensation package. It is also the mostcommon factor of comparison among employees. It includesBasic wageHouse rent allowanceDearness allowanceCity compensatory allowanceSalary and wages represent the level of skill and experience an individual has. Time to time increase inthe salaries and wages of employees should be done. And this increase should be based on theemployees performance and his contribution to the organization. Bonus: Bonuses are usually given tothe employees at the end of the year or on a festival. Economic benefits: It includes paid holidays, leavetravel concession, etc.Long-term incentives: Long term incentives include stock options or stock grants.These incentives help retain employees in the organization's startup stage. Health insurance: Healthinsurance is a great benefit to the employees. It saves employees money as well as gives them a peaceof mind that they have somebody to take care of them in bad times. It also shows the employee that theorganization cares about the employee and its family. After retirement: It includes payments that anEmployee gets after he retires like EPF (Employee Provident Fund) etc. Miscellaneous compensation: Itmay include employee assistance programs (like psychological counseling, legal assistance etc),discounts on company products, use of a company cars, etc.
Work environment: It includes efficient managers, supportive co-workers, challenging work,involvement in decision-making, clarity of work and responsibilities, and recognition. Lack or absence of such environment pushes employees to look for new opportunities. The environment should be suchthat the employee feels connected to the organization in every respect. Growth and Career Growth anddevelopment are the integral part of every individuals career. If an employee can not foresee his pathof career development in his current organization, there are chances that hell leave the organization assoon as he gets an opportunity.The important factors in employee growth that an employee looks forhimself are:Work profile: The work profile on which the employee is working should be in sync with hiscapabilities. The profile should not be too low or too high.Personal growth and dreams: Employees responsibilities in the organization should help him achieve hispersonal goals also. Organizations can not keep aside the individual goals of employees and fosterorganizations goals. Employees priority is to work for themselves and later on comes the organization. If hes not satisfied with his growth, hell not be able to contribute in organization growth. Training anddevelopment: Employees should be trained and given chance to improve and enhance their skills. Manyemployers fear that if the employees are well rained, theyll leave the organization for better jobs.Organization should not limit the resources on which organizations success depends. These trainingscan be given to improve many skills like:Communications skillsTechnical skillsIn-house processes and procedures improvement related skills
C or customer satisfaction related skillsSpecial project related skillsNeed for such trainings can be recognized from individual performance reviews, individual meetings,employee satisfaction surveys and by being in constant touch with the employees.Importance of Relationship in Employee Retention ProgramSometimes the relationship with the management and the peers becomes the reason for an employeeto leave the organization. The management is sometimes not able to provide an employee a supportivework culture and environment in terms of personal or professional relationships. There are times whenan employee starts feeling bitterness towards the management or peers. This bitterness could be due tomany reasons. This decreases employees interest and he becomes de-motivated. It leads to lesssatisfaction and eventually attrition.A supportive work culture helps grow employee professionally and boosts employee satisfaction. Toenhance good professional relationships at work, the management should keep the following points inmind.
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