Running head: Creation and implementation of an effective recruiting and retention program
Creation and implementation of an effective recruiting and retention program By
Mary F. Stokes
Table of Contents
Employee Retention: Factors and Drivers 4
Coca Cola Employee Retention Program 6
Valid and Effective Employee Retention Program8
Method in Determining Effective Employee Retention Program 10 Discussion and Recommendations for Effective Employee Retention Program in Coca Cola 11 References………………………………………………………………………………………..17
High employee turnover rate has been considered as one of the highest drivers for direct and opportunity cost to rise for companies. In the Coca Cola Retailing Research, Blake (2000) estimates that about US$5.8 billion annually are lost in the supermarket sector alone due to employee turnover. More importantly, this figure significantly reduces the profitability of firms to as much as 40%. Hence, the mantra that human resources or people are still the most important factor of production considering the improvements in technology is still a prevalent notion among scholars and businessmen alike (Buckingham and Vosburgh, 2001). With this in mind, human resources management is driven to attract and retain employees that have proved valuable in the company over periods of time. Essentially, employee retention and the reduction of employee turnover rate had been studied in the literature and in company case studies. However, despite the numerous studies provided to us, there are still debates that need to be resolved on the most potent factors that would make employees stay. This paper presents a case study of Coca Cola Company particularly it’s program on employee retention, the issues and challenges that it faces in terms of employee turnover, its impact on the company both financially and operationally, and the improvements that can be made in order to enhance the employee retention program and reduce turnover rates.
Employee Retention: Factors and Drivers
Employee retention on a macro-scale had generally been impacted by the external economy in general and the trends in the business sector (Frank and Taylor, 2004). On a micro-scale however, employee retention are affected by programs/policies of the company, wages and benefits in relation to its competitors, skills, training and promotion, employee motivation and satisfaction as well as other factors that are internal to the company. For instance, while the US economy had been considered at a low level in recent years, employee turnover had been maximal in the periods 2002-2003 because of the downsizing that had been prevalent in US companies. Add to this factor, employee discontent according to the survey of the Conference Board (2003) had been highest since 1995 and that employees are only waiting for a market recovery to look for other jobs (Kaihla, 2003). Hence, aside from these factors that needs to be considered by companies, employee turnover affects the cost of the US economy by at least US$5 trillion annually (Journal of Business Strategy, 2003) and reduces stock prices and earnings to about 38% (Sibson, 2000). Consequently, aside from the financial impact of employee turnover, employee retention has been directly correlated by Dresang (2002) to increase productivity as well as customer loyalty. Employee retention had been attributed to several factors; let us first analyze the factors identified in the literature to contribute employee retention and reduction of turnover. In Coca Cola, the top retention drivers between hourly employees and management employees were identified as follows. For the hourly employees, providing directions, availability of equipment and supplies and immediate supervision were identified as drivers for retention while for managers, it would be organizational direction, training and advancement (Frank, 2000). These factors validate earlier studies that front-line...
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