Hello,

I have started developing an management/supervisory development program that based upon the needs and skill gaps with our current team of supervisors and managers. We will also use this program for up and coming talent from the front lines moving into such positions.
This being said - I was asked to develop this program and now have to sell it to our Sr. Team for implementation. Does anyone know of resources where I could find some numbers related to why we should implement such a program and what will happen if we do not? Are there statistics out there in support for organizations implementing such programs for increased retention, increased productivity??

Thanks for your help
JRB

Rather than look for external benchmarks you should look at the needs and skill gaps that you are trying to improve on. What will the result of eliminating the skill gap be?
My experience has been that the Senior Team will not be satisfed with external numbers. Quantify the value to your organization of developing successors or better managers.

Example: Better managers will lower attrition. Therefore the value of the program or ROI is "the value of lowered attrition/cost of the program"
Program cost = $500,000, Lowering attrition saves the company $750,000
$750,000/$500,000=150% Return On Investment
These are the numbers they will understand.

Thank you - I like your example and definitely feel these numbers will also be important. They have also asked me for external benchmarks and therefore feel the need to give them something in this area as well.

Now I have a dumb question - how would I calculate the value of lowered attrition?

Thanks again

Agree with Dvsnhd99....keep your focus local.

If you were to look to outside indicators you might take an informal look at annual industry surveys (ASTD should have them)that describe training investments by company size/industry...etc. That only lets you know if you are in sync with those averages. It really isn't valuable until you can also match up your company's performance in the market versus it's competition....which of course will be the result of a variety of factors...of which employee development is only one.
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Employee attrition (turnover?) and attracting new customers share much in common. In both cases...keeping what you have is far less expensive than replacing them.

Do some basic data collection on what the costs are associated with new hires. Keep in mind, when you replace an employee you want to factor in the costs of recruiting-training-benefits changes (et al), the sunk costs in that were invested in the employee you are losing and the value of the talent that wasn't available during the transition.

Value of lowering attrition, one of my favorite numbers

The first number you will need is average employee salary or compensation. Let's say it is $75,000 per year.
Now you need to either accept an external benchmark for turnover cost (Saratoga and Hewitt estimate it a 1.5 x Salary) or create your own.
Creating your own is tough, you need to estimate: Reduced productivity prior to exit, time to fill, cost per hire, time to productivity etc.

Let's just go with 1.5 x salary.
One more thing to take into account is good vs. bad turnover. You don't necessarily want everyone to stay. IMHO As long as involuntary turnover is under 5-7% (Jack Welch I am not) I consider it to be good. So I tend to look a voluntary turnover as bad turnover.

Ok now for the numbers. If you have 1000 employees and your voluntary turnover is 25%, your attrition cost is 1000 x .25 = 250 x $75,000 = $18,750,000.
If you lower attrition to 20%. 1000 x .2 = 200 x $75,000 = $15,000,000
Lowering attrition 5% will save $3,750,000!

Hope this helps.