We're Celebrating 10 Days of SHRM! Today's Gift: $15 to Starbucks w/ a SHRM professional membership. Promo code 10DAYSBUCKS.
Training, policies and tools to help HR prevent and respond to harassment claims.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Develop your HR competencies and knowledge in-person in 12 U.S. cities or virtually.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
Evaluation of Three Strategies To Increase Retention
A hypothetical company is considering three ways to increase employee retention: raising salaries, adding fringe benefits or providing training designed specifically for the jobs.
The following analysis comparing the net present value (NPV) of the three alternatives was prepared by Robert A. Connolly, an associate professor of international finance and economics at the Kenan-Flagler Business School of the University of North Carolina at Chapel Hill.
He estimated costs and revenue for each option over five years, with revenue estimates including productivity associated with more experienced workers. He then converted the results to a single net present value measure for each option.
The first line shows the companys baseline forecasts of its annual revenues, starting at $3.5 million and projected to grow 4.5 percent a year. Other assumptions are listed below the chart.
In this scenario, Option 1 is barely sensible on financial grounds. NPV is positive, but not by much. Option 2 is senseless on financial grounds. NPV is negative. Option 3 is very attractive on financial grounds. NPV is substantially positive, reflecting substantial impact from special training. Combining Options 1 and 3, higher salary and special training, seems especially productive.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Join SHRM's exclusive peer-to-peer social network
SHRM’s HR Vendor Directory contains over 3,200 companies