The Challenge Facing Employers Today
You Have to Spend Money to Make Money
Disabled Workers: Economical Way to Fill the Need
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The Challenge Facing Employers Today
Even during the recent recession, businesses across
the U.S. many times find it difficult to hire
qualified individuals for getting their work done.
Consider these three sources about the depth and
breadth of this problem:
- Recent employer surveys clearly show that the
number one problem for American companies today is
finding an adequate supply of qualified employees. The
high costs of employee turnover coupled with the
insufficient number of qualified employees present a
risk to America's businesses maintaining the
competitive edge, according to the Office of Disability
Employment Policy, U.S. Department of Labor.
- "On average, U.S. companies experience 50 percent
turnover every four years," says Sage Learning Systems
in a list its has compiled of facts and figures about
training, work and jobs.
- Employee turnover is expensive. Turnover costs
more than $10,000 per employee every year at nearly
half of the 206 medium-to-large organizations surveyed
by William M. Mercer, Inc, a New York based human
resource management consulting firm, according to the
Bureau of National Affairs. Even in those
companies that estimate lower costs, the impact on the
bottom line is as serious as it is cumulative. The
solution is to find ways to cut turnover. That costs
less than replacing staff who leave for a variety of
reasons: new jobs, family responsibilities, health
concerns, going back to school, relocation and others.
This cost will only rise in the next decades as Baby
Boomers retire and cannot be replaced by the smaller
numbers of individuals in succeeding generations of
workers.
Someone who is not a businessperson may think the
time between an exiting employee and a new hire for
the same job would be a net savings. Instead, it's a
net loss when you consider the investments required
for finding and training a new employee. When a worker
leaves, all that investment in recruiting, hiring and
training her leaves with her. It's gone. You need to
start from zero again and spend time, money and effort
in recruiting, hiring and training her replacement.
Departments of human resources within companies have
whole teams dedicated just to staffing. The costs
associated with staffing include outlays for
recruiting ads, screening candidates, interviewing
candidates and training new workers -- as well as all
the administrative support for these tasks.
The cash outlay for staff and services to find a
replacement, however, is not the end of the high costs
in turnover. In a small business, for example, the
required recruiting, hiring and training often divert
executive and manager attention away from other
critical tasks. "It should be noted that the costs of
time and lost productivity are no less important or
real than the costs associated with paying cash to
vendors for services such as advertising for temporary
staff. These are all very real costs to the employer,"
affirms William G. Bliss in a checklist of turnover
costs published in Small Business Adviser.
That lost productivity can be critical for small
businesses. "An analysis of Census Bureau data
confirms that small enterprises have higher labor
turnover rates than larger firms. And, while a big
business may survive the effects of a revolving
employment door, most small operations cannot," states
Bootstrapper's “Success Secrets: Five Ways to
Beat the High Cost of Employee Turnover.”). The same
article goes on to offer the example of the costs for
replacing a $20,000-a-year administrative assistant,
and it comes up with a figure of $3,000 -- no small
potatoes for a small employer.
No wonder, then, that the smart employer tries to
figure out how to keep – instead of replace -- a good
worker. Businesses are seeking strategies to retain
existing employees. Some pay higher wages and
salaries, increase benefits, provide above-and-beyond
worker support programs, or simply spend more time and
money finding the best people to hire.
Everything that has been documented about employees
with disabilities shows they can play an integral part
in a successful and cost-effective strategy for
locating and hiring loyal, dependable workers.
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You Have to Spend Money to Make Money
The bottom line is that employee turnover robs your
company, lowering profits because continuously having
to replace people results in added operating expenses.
To find out just how much replacing a worker costs
your company, check the online employee turnover cost
calculator.
This calculator shows the loss of one employee
actually involves several expenses. Under separation
costs, you may have the cost of administrative
functions related to termination, separation pay and
increased unemployment insurance rates. Vacancy of the
position may save you the former worker's wages and
benefits but that amount is quickly eaten up in
overtime or temporary staffing costs to address the
loss of her productivity. Replacing the employee
involves both pre-employment and post-employment
administrative expenses, recruiting costs, screening
costs, training costs and all the staff time involved.
Finally you encounter the "performance differential"
(i.e. the loss of the former employee's accumulated
skills, knowledge, workplace relationships, and
organizational history).
Any good businessperson knows you have to spend money
to make money. Startup capital, advertising costs,
expansion costs, hardware and software upgrades and
research and development are all commonplace and
accepted investments in the future of a company.
Attracting and retaining productive employees is
another well-known cost that employers accept.
Yet businesses have balked at investing in several
voluntary and mandatory programs that, in fact, have
reduced turnover costs. Value-added benefits, such as
Employee Assistance Programs (EAPs), once viewed as an
expensive luxury, have proven to have at least some
positive impact on turnover. Referring specifically to
substance abuse programs, Boddie-Noell Enterprises
found, in a survey conducted among 400 Hardee's fast-
food establishments, “57 percent of the outlets that
had EAPs reported that they have a positive financial
impact, mainly through reduced employee turnover and
absenteeism."
The hotly debated Family and Medical Leave Act has
proved to impact the bottom line in a positive way
unanticipated by businesses. Surveys conducted by the
U.S. Department of Labor after enactment found
that "Employers are having little difficulty
administering the benefits and, in some cases, find it
actually reduces turnover rates and improves
productivity."
Employers who hesitate in hiring workers with
disabilities often cite the cost of specific
accommodations for individual employees. For
example, during a January 2002 radio program, The
Conversation, on KUOW-FM, a caller, commenting
on a Supreme Court decision about the Americans with
Disabilities Act, expressed irritation with being
expected to "baby-sit" disabled workers. The
implication was that he would be "carrying" these
workers without a return on the expenses involved.
Many such people are unaware of the abilities of
employees with disabilities. They are often highly
qualified individuals who offer more to an employer
than what they "cost." Those employers who are better
informed about the types of adaptive technology
available for blind employees, such as screen readers
and screen magnification for computers, and use
contemporary methods of selecting qualified
individuals for jobs, don't fear the cost of
supplying accommodations.
Yet, like other programs often reluctantly adopted by
business that later prove to help more than hurt
employers, accommodations are, many times, win-win
situations. Accommodation costs for workers with
disabilities are often more than offset by the
reduction, sometimes dramatic, in the costs associated
with employee turnover.
The Job Accommodations Network (JAN) estimates
that more than half of the accommodations that must be
made for disabled workers cost less than $500.
- Addressing myths and realities about disabled
workers, Mothers Against Drunk Driving (MADD)
observes:
- Compare the $200 average accommodation cost (for
the employee who stays on the job) with the roughly
$1,500 or more it costs a company to train each (new)
employee (who soon leaves for another company). In
fact, the JAN study claimed that for every dollar an
employer spends on disability-related job
accommodations (for the employee who stays), the
company saves $34 in worker's compensation and other
insurance savings, increased productivity, and the
cost of training new employees.
Nor is expensive special training required in
most cases. "In many cases, minimal or no special
training is required,” according to MADD. “Most
disabled workers can learn a job the same way as would
a non-disabled worker. In cases where special training
or adaptation is required, outside assistance often is
available, frequently at no cost to the employer."
Look at JAN's cost/benefit ratios. Nearly all (96 percent)
of the employers surveyed reported that they saved
money thanks to hiring or retaining disabled employees,
making needed job accommodations and, as a result,
reducing employee turnover. Fifteen percent saved up
to $5000, while a full 20 percent said they saved
between $20,001 and $50,000 in employee replacement
costs. "Using the average (mean) cumulative figures,”
JAN says, “for every dollar spent to make an
accommodation, the company got $34.58 in benefits."
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Disabled Workers: Economical Way to Fill the Need
People with disabilities bring unique benefits to a
workplace, and those benefits outweigh the simple
requirement that they receive equal opportunity to
join and advance in it. One of those benefits is
longevity.
As employees, people with disabilities have shown they
can perform. According to studies dating back to the
1950s at DuPont, "Employees with disabilities equal or
exceed co-workers without disabilities in job
performance."
MADD, on a web site called, “Picking Up the Financial
Pieces, says, "Employers also have reported that
disabled workers are very loyal, reliable, and
motivated workers, with a low turnover rate."
The U.S. Department of Labor reports on the experience
of several employers who tracked overall worker
turnover after significant increases in the number of
disabled employees. The impact on employee turnover
was dramatic. For example, at Carolina Fine Snacks in
Greensboro, N.C., "turnover dropped from 80 percent
every six months to less than 5 percent." Kreonite,
Inc., Wichita, Kan., noted the overall impact of
reduced turnover on "training cost and unemployment
cost, improvements in company loyalty, productivity,
job responsibility and work ethics."
But won't disabled employees take a lot of sick leave
or be prone to injury? The same studies conducted by
DuPont found that employees with disabilities also
matched or exceeded non-disabled employees' records
in "attendance and attention to safety." Disability
is not equivalent to illness. For instance, a blind
person may be perfectly physically fit and healthy.
And people with disabilities tend to learn quickly to
compensate for any safety hazards. For instance, I
find that in my crafts guild I am among the least
prone to cutting myself on tissue blades -- despite my
visual impairment. I am simply more careful when I use
them.
What accounts for this performance and reliability
among employees who are disabled? It is not hard to
see how a disabled person, someone with the same hopes
and dreams as anyone else, may just be a little more
grateful for a chance to attain them. Given the
paucity of prospects in the first place, a disabled
worker will think twice about leaving a current job.
Many people with disabilities will work harder just to
prove to themselves, to others and to you that they
can carry out their responsibilities effectively.
"OK, you've convinced me," you say, "but isn't it
against the law to hire people because they are
disabled?"
You not only can favor a disabled person in hiring an
individual for a job but you can also be rewarded for
doing so. Affirmative action only applies to
government jobs in the United States. Even in states
where affirmative action is not allowed, giving
preference to hiring people with disabilities is
allowed. A blind (or otherwise disabled) candidate may
not be the most qualified candidate for a job, but, if
you feel her combination of skills, education,
experience and attitude provides you with the
opportunity to increase your company's productivity
over the long run, you can pass over more qualified
candidates who are not disabled.
In a large number of instances, you can receive
financial rewards for this type of affirmative action.
The federal government in the United States and
programs in many other countries offer both tax
incentives and financial assistance. If hiring a
disabled person requires accommodation, you often can
recoup the expenses or have the cost covered outright
by government agencies.
Why? Because the unemployment rate for qualified,
disabled individuals who are actively seeking jobs is
still around 70 percent. It can be argued that the
only way they can get jobs and build on-the-job
experience and skills is by favoring them in hiring
practices.
As an employer, there is no way you can lose. You have
the opportunity to recruit an employee who has the
right skills, education and experience -- one who will
likely stick around and grow in her contributions to
your company's continued success, saving you the cost
of replacing her. You may get tax incentives --
whether or not you need to accommodate the job for
this person. If you do need to get adaptive aids, you
may be able to receive reimbursements for those costs
through a government program.
Finally, with a disabled worker's statistical
likelihood for high productivity and low
absenteeism in addition to longevity and loyalty, you
can come out way ahead of the game -- and your
competitors -- in the quality of the people you employ
and the total costs for your labor force.
See Related Content for additional articles on eSight.
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