When Employee Attrition is Inevitable

When Employee Attrition is Inevitable:

Studies predict that replacing a salaried employee costs 6 to 9 months’ pay on average. For a manager making $40,000 a year, that’s $20,000 - $30,000 in recruiting and training expenses. Other studies have predicted even higher costs for high-earning employees - as much as double their annual salary!

According to the Bureau of Labor Statistics, turnover is highest in industries such as trade and utilities construction, retail, customer service, hospitality and service – industries that are often plagued with volatile business cycles. Weather, retail cycles, manufacturing down-time, plant-retooling, and maintenance outages in these industries can often bring about a temporary shut-down, resulting in a temporary work stoppage and in many cases, pause of payroll processing.

Retaining a workforce can be challenging enough during regular operations, but when paychecks are routinely replaced with unemployment, a workforce starts becoming unsustainable – leaving the company to re-start operations on a slimmed-down workforce while simultaneously re-recruiting, re-interviewing and re-training.

The solution:

Transition Services Inc., offers a fully managed Retention Pay Program which helps prevent the loss of valued employees (Union or Non-Union) by protecting their income during temporary work stoppages.

Our solution to providing affordable employee retention uses a decades-old, IRS-approved structure, the Supplemental Unemployment Benefits Plan (SUB). Using this structure, employees may maintain their weekly income during down-time while the employer saves 30% - 40% compared to traditional programs. This is accomplished by the integration of State Unemployment and re-classing payments from wages to benefits, thereby saving employment taxes.

A SUB Plan bridges the gap between employee and company needs during downtimes. For organizations with existing retainer-pay programs, converting to a SUB Plan can free up significant dollars for other key benefits. Or, if you don’t have a current retainer program, imagine if you could guarantee resource repeatability for your company and your customers rather than losing resources during downtimes because a retention program was too expensive. Whichever category your organizations falls in, a SUB Plan has the potential to dramatically enhance your employment offering and deliver a competitive advantage.