Coming to work 3 years ago for Palo Alto Software was quite a change from my previous post of 10 years in corporate America. One of the many refreshing changes: a family friendly company. It is not unusual to see a tot in the office from time to time, stopping in with mom or dad. My colleague Josh recently had his 13 year old son in for a few hours to see what his dad does. I got to sneak him in to one of my conference calls. It was fun to see him taking it all in. When my daughter was born, Palo Alto gave us a generous gift basket full of baby gear, and delivered hot meals to our house the first few days we were home from the hospital. This is common practice for new parents here.

A company is smart to engage in such practices when possible and as appropriate to their work environment. There are a wide variety of relatively low cost way to ensure happy (translation: productive) employees. Offering such perks has no doubt had an effect on the employee loyalty that exists here at PAS. Our annual retention rate averages about 95%.

From a bottom line perspective, being proactive in creating employee satisfaction pays off. SHRM, the Society for Human Resource Management, estimated that it costs $3,500.00 to replace one $8.00 per hour employee when all costs — recruiting, interviewing, hiring, training, reduced productivity, etc, were considered. Other sources provided estimates that it costs 30-50% of the annual salary of entry-level employees, 150% of mid-level employees, and up to 400% for high level employees.

Ross Blake of Retention Associates offers a few tips on keeping retention in check:

1. Put a retention program in place before you have a crisis situation. You not only must find out why employees leave your organization, you must also find out why others stay.

2. Survey your top performers now in order to find out what keeps them there, why they might leave, what type of competitive offers they may find attractive, and what they need to be happier and more productive in their jobs.

Sources estimate that a 10% reduction in employee turnover is worth more money than a 10% increase in productivity, or a 10% increase in sales. This might be a component you want to consider when writing or updating your business plan. Keeping employees happy is no accident!

Beth Anne Whalen

Palo Alto Software, Inc.

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