turnover

Professional Employer Organizations (PEOs) are for more than just employees. PEOs are designed to get employers out of the employer business, so that business owners and executives can focus their energies entirely on core, revenue-generating activities. But with the emphasis on transactional and legal responsibilities, it’s sometimes easy to forget the business outcomes that PEOs can help produce. 

Most HR departments track employee metrics like turnover, engagement, and retention at the organizational level. That’s a sensible approach – but maybe not the best one.

We recently wrote about the impacts of HR outsourcing (HRO) on employees, noting that employee turnover was 10 to 14 percentage points lower for companies that used professional employer organization (PEO) services versus comparable companies that did not. That strongly suggests that the HRO relationship benefits employees, but do employees understand the value of what they’re receiving?
Salaries are rising in 2016. The Federal Reserve Bank of Atlanta notes that wage and salary growth has risen to more than 3%, versus a steady 2% annual pace between 2011 and 2014.
Turnover is expensive. Losing employees, and then having to replace them, sometimes over and over again, adds up fast. It’s not pretty.

Business software giant SAP recently posed an interesting HR question: How well do you manage your employee turnover? They suggested that employee turnover is, in fact, “the ultimate HR test,” noting that as turnover decreases (generally good), average revenue per employee increases (always excellent).

But in our experience, this is a deceptively tricky question.

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