English 211 Business Solutions

Descriptive Essay - Economy of New York.pdf


To: Creative Answers LLC.
From: Business Solutions Inc.
Date: April 25, 2016
Subject: The Most Effective and Cost-Efficient Solution for Your Attrition Rate

Since 2010, Business Solutions Inc., has served small to large firms worldwide, providing top-notch service in the industry to customers. With our analysts and specialists holding extensive experience in business strategies and ensuring the success of virtually all types of business, we have earned 97% customer satisfaction rate with 99% rate of our solutions being implemented and proven to be successful.

We will also be able to help you with your attrition rate problem you are experiencing and we are confident that you will also be satisfied with the results.

Please see our proposal, attached.
We look forward to our cooperation.

Business Solutions Inc.

Towards the end of the year and going into the new year, all employers should be reflecting on the year as well as thinking of goals for the new year for their business. Are employees productive? Are sales increasing or decreasing? Is the quality of work improving or decreasing? While all of these issues are things that should be taken into consideration, one of the most important factors to consider, is the business’ turnover rate (High, 2013). We will first address the why the issue of turnover is vital, what our objectives would be, how we plan to find the root problem and provide a solution, and the plan of action in order to ensure your business is successful.

When employees leave a firm - whether it is due to the hiring or resigning of the employee, their absence leaves a hole; and the higher the turnover rate is, the more holes the business has to deal with which means more cost as well (Phibbs, 2014). According to a study conducted by the Missouri Business Development Program, a turnover of one employee earning $7.65 on an hourly rate equals to about $5,000 of financial damage involved with searching, hiring, and training a replacement (Mushrush). Wall Street Journal in ‘How to Reduce Employee Turnover’ also provides an estimate that the cost of replacing an employee can be as high as double the employee’s salary (How). As evident, having a high employee turnover hurts the company financially, especially in light of lower productivity caused by reducement of working power. However, financial damage is not the only type of damage and there are other indirect consequences as well such as increased workloads and overtime expenses for the remaining employees as well as decreased employee morale which all equates to reduced productivity - both in terms of quantity and quality of the employee's’ performance at work (Mushrush). To get a better understanding how damaging high attrition rate can be to a company, below is a representation of the percentage the company will lose in relation to the salary level of an employee (Boushey H. and Glynn S.J., 2016):

Cost of replacing employees in US

Boushey, H., & Glynn, S. J. (2012, November 16). There are significant business costs to

replacing employees. Retrieved April 24, 2016, from cdn.americanprogress.org website:


In order to first gauge the healthiness of your company in relation to your attrition rate, you may refer to the table below as it is also important to note that not all attrition implies a bad thing (Boushey H. and Glynn S.J., 2016):

Average Turnover Rate in U.S. by Industries for 2013:
All industries15.1%
Banking & Finance17.2%
Manufacturing & Distribution13.3%

A higher attrition rate than that listed in the table above according to the specific industry you are in may mean it is at an unhealthy level (Boushey H. and Glynn S.J., 2016).

With the problem of unhealthy attrition rate at hand, no organization will surely want to experience the pain in any way that comes with employees leaving. The objectives of this proposal when facing issues of turnovers, will look at several factors such as the improvement of the environment at work, practicing smart hiring strategies, and exploring creative solutions to keep employees happy through compensation packages and other ‘out of the box’ rewards for employees (Mushrush).

Although fixing the problem of turnover rate is by no means a rocket science, companies face this problem year after year, with some firms even going bankrupt as a result. At Business Solutions Inc., we have helped these firms revive or minimize potential losses by addressing the objectives above for improving the environment at work, practicing smart hiring strategies, and


ensuring that the company is organized optimally. More specifically, the following will be performed:

1) Hire the right employee and work with them to develop their careers.
One of the most important things companies often overlook as they get distracted with the scope of work and work performance is considering whether their employees feel like they are developing their career. Most often it is easy to get stuck with one role that might not be not challenging to the employee or are repetitive and not stimulating for the employee. Hence, it is important that companies pay attention to career development of their employees such as tuition reimbursement, skills training programs, and sending them to conferences (Mushrush). Another fact the employer may want to consider, is investing into the workforce. What this means, is that when hiring, the recruiter should imagine the candidate being a long term fit for the company (Mushrush). This can include analyzing the candidate’s culture, values, and principles, and making sure they match the company ethos as much as possible (Mushrush). The combination of hiring the right candidates that has a good fit and training them as necessary to develop their careers within the company will pay off in the long run, as it ensures that the employee is more loyal and therefore retain with the company (Mushrush).

2) Develop an employee oriented culture.
Believe it or not, one of the recipes for companies with a healthy retention rate are those that are employee oriented (Mushrush). . This can be achieved through actively soliciting the input and comments/feedback as well as getting employees involved as much as possible. As such, a company who operates with an open-door policy would be most ideal and it is important to avoid closed-door meetings when possible; basically, this translates to ‘transparency’(Mushrush). Additionally, what it means to be employee oriented, is to also provide employees the opportunity for advancement such as providing rewards and micro-manage them all the time as this decreases their creativity as well as their motivation. Rewards can be in any form including name recognition or salary raise or bonus (Mushrush). Basically, employees should believe they have a voice and are recognized for their contribution. As Missouri Business Development Program state, “trust and loyalty are a two-way street” (Mushrush).

3) Develop a compensation package strategically.
To start off with, just having to provide a compensation package can sound very vague. However, it should always consider two factors: base salary and bonuses, plus benefit package(s) (Mushrush). Today, there are many companies to compete with when it comes to hiring; and as part of the job selection process for a candidate, one thing they look most for, is their overall compensation package and at which company they would get the best deal for their work (Mushrush). Hence, many companies today offer benefit packages including health, dental and life insurance, vacation and leave policies, investment plans, and retirement plans (Mushrush).

4) Explore creative options.
While it is important to have a competitive and comprehensive compensation package


for employees, it is more beneficial if the employer can get creative with the benefit it offers to each employee as well (Mushrush). Instead of taking a ‘one size fits all’ approach and providing the same compensation package for employees, the employer should take into consideration the specific needs and importance of different values for each candidate. For example, if the employee has several children and is most worried about the well being of his/her children while he/she is at work, one option the employer can consider, is providing child care as either an additional benefit or even replacing it with reduced caps of insurance plans (Mushrush).

5) Explore other alternative options.
Another thing that can be beneficial for an employer to consider, are to look into other ways it can provide benefits that are oriented to the employee other than compensation packages (Mushrush). This might include allowing for adjusting employee’s work schedule, allowing for flexible hours according to their personal schedule, or providing programs such as providing health/gym memberships that are proven healthy which then lead to higher efficiency and productivity at work. Benefits other than a raise or bonus that is not directly related to their job as a way to recognize their performance can not only be cost-effective, but also induce a sense of human-ness between employer and employee. Examples include tickets to events, tickets to trips (Mushrush).

The solutions we propose in the aforementioned points are simple yet effective. In order to achieve the aforementioned solutions, the following are some methodical ways in which results can be realized:

1) Assess and analyze the possible root causes for employee turnover rate and measure the turnover rate.
By industry standard, turnover is calculated by dividing the number of lost employees per year by the average number of employees in a given year (Mushrush). After the turnover rate is properly calculated, specialists from Business Solutions Inc. will conduct on-field and off-field surveys and interviews as well as well as examine the issues and needs of your employees to most accurately determine the reasons for employee churn and develop creative programs to address these needs.

2) Calculate the turnover cost.
In order to most accurately analyze the next plan of action for fixing the turnover problem, the true cost will be calculated (Mushrush). This will take into consideration the average salary of your employee, the average cost of compensation packages as well as other plans provided for the employee within a year. Hence, you will be able to see the expected financial damage resulting in the loss of each employee. This will then allow us to provide you with a more firm plan of action that would not only be effective but also cost-effective for your company.


3) Offer compensation packages in an ‘out of the box’ way
As exemplified in the last point of the solutions section above, one way to keep an employee satisfied is through finding out what he/she really needs such as in the case of the employee who is most concerned about her children (Mushrush). In such cases, our specialists will calculate the possible damages the employee being absent due the lack of child care can have on the business and take into consideration other costs (Mushrush). We will be able to provide to you with an equation for special cases such as this which will allow you to easily compute and decide the rate and situation in which you are able to afford such offers.

To conclude, the problems you are experiencing with attrition rate is something that can definitely be overcome. Our highly skilled specialists will not only analyze the root cause of the problem, but will also calculate the costs and benefits for implementing recommended solutions. Our solutions to start off with, will take into consideration different ways of hiring, creative ways of providing compensation packages, as well as offering benefits both directly and indirectly related to the work. With further analysis, we will then be able to provide you more detailed solutions as well as equations which you will then be able to use in further calculations for enhanced decision makings and clarity. We believe our solutions are comprehensive and suited well exactly for your needs. We look forward to helping you achieve your goals of decreasing your attrition rate and creating a better workplace.

How a high turnover rate impacts your employees. (2013, January 22). Retrieved April 24, 2016, from

http://hr.sparkhire.com/ website: http://hr.sparkhire.com/talent-management/


How to reduce employee turnover. (n.d.). Retrieved April 24, 2016, from http://guides.wsj.com/

website: http://guides.wsj.com/management/recruiting-hiring-and-firing/


Mushrush, W. (n.d.). Reducing employee turnover. Retrieved April 24, 2016, from

http://missouribusiness.net/ website: http://missouribusiness.net/article/


Phibbs, B. (2014, February 4). 8 reasons why your retail employee turnover is so high. Retrieved

April 24, 2016, from http://www.retaildoc.com/ website: http://www.retaildoc.com/blog/


Boushey, H., & Glynn, S. J. (2012, November 16). There are significant business costs to replacing

employees. Retrieved April 24, 2016, from cdn.americanprogress.org website:


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