Proposal for

Employee/Turnover
Retention
Scott T. Oakley

Proposal for
Employee/Turnover
Retention
Scott T. Oakley

Executive Summary
The objective of this proposal is to provide the means for Federal Screw
works to implement workplace policies that benefit workers and help boost
employee retention. Maintain a stable workforce by reducing employee
turnover through better benefits and flexible workplace resulting in significant
cost savings to Federal Screw Works.
The opportunity exists for cost savings in separation such as exit interviews,
severance pay, and higher unemployment taxes; The cost to temporarily
cover an employees duties such as overtime for other staff or temporary
staffing; and Replacement costs such as advertising, search and agency
fees, screening applicants, including physicals or drug testing, interviewing
and selecting candidates, background verification, employment testing,
hiring bonuses, and applicant travel and relocation costs.
I am recommending based on the high employee turnover of both the hiredin full time employees and temporary employees an assessment of the
current situation to be conducted over several meetings with upper
management and supervisors to determine the current policies and research
possible areas of opportunity for improvement. This will also include several
interview with key skilled employees for feedback and recommendations.
Once the policies have been clearly defined I will them develop a new
employee retention manual and train supervisory positions on new policy.
The assessment of current workflow and production practices will be
conducted with meetings/interviews with key management and employees.
Upon completion, I will move forward with the creation of new positional
employee training manuals and conduct several training sessions alongside Federal Screw Works supervisors.
Expected results for Federal Screw Works, Big Rapids MIs are as follows:
Financial Benefits include cutting employee turnover by 1/3. Cost savings of
$1,500 3,500 per employee (annually); Increased production from new
training. Cost benefits several thousands (annually); and increased quality of
products. Cost benefits in the thousands (annually)

FAST FACTS

According to the Bureau

of Labor Statistics U.S.
Department of Labor
August (2014).
Turnover Rates nationally
for the month of August,
2014 were 227,000 in the
manufacturing industry.
Turnover replacement
costs are $14,500 per
individual
According to Employment
Policy Foundation
tabulation and analysis
of Bureau of Labor
Statistics, Employer Cost
of Employee
compensation data
(2007)
U.S. Businesses spend
billions of dollars recruiting
and replacing employees.
Individually, it costs
between $4,000 and
$14,000 to replace an
hourly employee, and
upwards of $40,000 to
replace a manager. The
U.S. Census Bureau
indicates the workforce will
begin to experience a
negative growth rate
beginning in the year 2015.

SCOTT T. OAKLEY
PROPOSAL FOR SERVICES
For Independent Contractors

OVERVIEW
With pleasure, I submit this proposal for services to support Federal Screw Works, Big Rapids MI in achieving its
goals for improving employee turnover by providing a structured employee retention manual, management training
and an employee training manual highlighting detailed job requirements, skills, benefits and step-by-step procedural
practices. I have partnered with dozens of businesses throughout the Nationbusinesses committed to improving
process work-flow, project management, training, IT and employee/customer relationships.

The Objective
Implementing workplace policies that benefit workers and help boost employee retention is not simply a nice thing
for businesses to do for their employees. Maintaining a stable workforce by reducing employee turnover through
better benefits and flexible workplace policies also makes good business sense, as it can result in significant cost
savings to employers.
Reduce Employee Turnover
Consult and Train Supervisors on Employee Retention
Assess and Implement new Workflow/Production plans
Develop positional training manuals
Provide Business Relationships for new hires

The Opportunity
Indeed, it is costly to replace workers because of the productivity losses when someone leaves a job, the costs of
hiring and training a new employee, and the slower productivity until the new employee gets up to speed in their new
job. According to Boushey (2012) an analysis reviewed 30 case studies in 11 research papers published between
1992 and 2007 that provide estimates of the cost of turnover, finding that businesses spend about one-fifth of an
employees annual salary to replace that worker.
Direct costs:

Separation costs such as exit interviews, severance pay, and higher unemployment taxes

The cost to temporarily cover an employees duties such as overtime for other staff or temporary staffing

Replacement costs such as advertising, search and agency fees, screening applicants, including physicals
or drug testing, interviewing and selecting candidates, background verification, employment testing, hiring
bonuses, and applicant travel and relocation costs

Training costs such as orientation, classroom training, certifications, on-the-job training, uniforms, and
informational literature

Indirect costs:

Lost productivity for the departing employee who may spend their last days on the job writing exit memos or
with reduced morale

Lost productivity due to the need to hire temporary employees

Coping with a vacancy or giving additional work to other employees

Costs incurred as the new employee learns his or her job, including reduced quality, errors, and waste

Reduced morale

Lost clients and lost institutional knowledge

The Solution
The following is the proposed recommendation:
Conduct an Assessment/Review of Current Policies
Develop Employee Retention Manual
Train Supervisors on Implementing New Policies
Assess Current Workflow/Production Practices
Develop New Positional Training Manuals
Provide New Hire Business Relationships

OUR PROPOSAL
Federal Screw Works, Big Rapids MI has a well-deserved reputation for quality products and customer service.
However, faced with the volatile turnover and retention of skilled employees in the workplace companies are forced
now to evaluate and make necessary changes to their current policies and expand business relationships to keep the
employment costs as low as possible.
I have over fifteen years experience consulting and delivering innovative solutions to problems within the
management, human resources, IT, project management, employee and customer relations areas within over onehundred companies over several different industries. The solution will easily be implemented and executed along with
a timeline that fits within Federal Screw Works method of choice. Most importantly, I provide the training and support
for this new solution that ensures your staff can ramp up quickly and realize concrete improvements in production,
employee satisfaction, and customer satisfaction.

Rationale
There are many statistical reasons behind suggestion of this proposal; Here are just a few:
Research According to Boushey (2012) The Great Recession sharply increased the share of workers
involuntarily leaving their jobs. At its peak in early 2009, the share of the total labor force subject to what the
Bureau of Labor Statistics calls layoffs and dischargesbut what those affected might refer to as getting
cannedwas 2 percent, up from 1.2 percent in 2006, before the recession began. As unemployment remained
high, the recession and subsequent recovery reduced the number of workers who voluntarily left a job. In 2011,
23.6 million workersor 17.9 percent of the total workforcequit their jobs, down from 22.6 percent of the
workforce in 2006.
According to Boushey (2012) the cost of employee turnover for businesses is high, regardless of the level of
wages being paid to the departing or incoming employees. Workplace policies that improve employee retention
can help companies reduce their turnover costs.

Execution Strategy
Our execution strategy incorporates proven methodologies, extremely qualified personnel, and a highly responsive
approach to managing deliverables. Following is a description of our project methods, including how the project will
be developed, a proposed timeline of events, and reasons for why we suggest developing the project as described.
I am recommending based on the high employee turnover of both the hired-in full time employees and temporary
employees an assessment of the current situation to be conducted over several meetings with upper management

and supervisors to determine the current policies and research possible areas of opportunity for improvement. This
will also include several interview with key skilled employees for feedback and recommendations.
Once the policies have been clearly defined I will them develop a new employee retention manual and train
supervisory positions on new policy.
The assessment of current workflow and production practices can now be conducted with meetings/interviews with
key management and employees. Upon completion, I will move forward with the creation of new positional employee
training manuals and conduct several training sessions along-side Federal Screw Works supervisors.
With the several business relationships I have acquired over the years, I will then be happy to make suggestions
and/or establish relationships that will improve the quality of new-hire practices. These may include temporary
employment companies and developing an internship program with universities to improve the quality of new
employees.

Project Deliverables
Following is a complete list of all project deliverables:
Deliverable

Description

Assessment of current policy

Meetings with upper-management and supervisors

Employee retention Manual

Detailed description of policy and procedures

Management/Supervisor
Training

One-week training sessions with Management/Supervisors over new employee

retention policy and practice.

Assessment of Workflow

Assessment of current workflow and production practices

Position Training Manuals

Detailed job description and position operating procedures

Employee Training

Hands-on employee training

New-hire Practices

Consult and build new-hire business relationships

Timeline for Execution

Key project dates are outlined below. Dates are best-guess estimates and are subject to change until a contract is
executed.

Description

Start Date

End Date

Duration

Assessment of current policy

11/23/14

12/06/14

5 days

Current and new policies reviewed/accepted

12/06/14

12/13/14

2 days

Create Employee retention Manual

12/13/14

1/23/15

180 hrs.

Training of Management and Supervisors

1/23/15

1/30/15

5 days

Workflow/Production Assessment

2/20/15

3/20/15

20 days

Position description/training practices accepted

3/20/15

3/27/15

2 days

Create Positon Training Manual

3/27/15

5/27/15

360 hrs.

Employee Training

5/27/15

6/27/15

20 days

New Hire Practices and Relationships

6/27/15

7/2715

5 days

Supplied Material
The following materials are to be supplied by Federal Screw Works, Big Rapids MI for this project. For Scott T.
Oakley to meet project milestones, this material must be supplied on schedule. The due dates included in the
following table represent our best guess based on current proposed project dates:
Materials to be supplied by Federal Screw Works, Big Rapids MI

Due Date*

Filled out Questionnaire (Appendix II)

12/06/14

Printing of Manuals

1/23/15 & 5/27/15

*I cannot be responsible for cost overruns caused by clients failure to deliver materials by agreed-upon due dates.

EXPECTED RESULTS
I expect our proposed solution to Federal Screw Works, Big Rapids MIs requirements to provide the following results:

Financial Benefits
Cut employee turnover by 1/3. Cost savings of $1,500 3,500 per employee (annually)
Increase production from new training. Cost benefits several thousands (annually)
Increased quality of products. Cost benefits in the thousands (annually)

Technical Benefits
Higher quality of products
Lower on-the-job injury rates
Faster training of new-hires and cross-training of current employees

Other Benefits
There is also the anticipated benefits of increased employee morale and internal relations with management and
supervisors.

PRICING
The following table details the pricing for delivery of the services outlined in this proposal. This pricing is valid for 30
days from the date of this proposal:
Services Cost Consulting/Assessments
Daily Rates - $300 per day (Estimated @ 29 days)

Price
$8,700

Hourly Rates - $55 per hr.

??

Total Services Consulting

$8,700

Services Cost Manuals and Training

Hourly Rate for Creation of Manuals - $25 per hour (Estimated @ 540 hrs.)

$13,500

Training - $ 320 per day (Estimated @ 25 days)

$8,000

Printing and Materials (approximate; subject to change as needed based on #240)

$7,800

Total Services (Manual and Training)

$29,300

Total $38,000
Disclaimer: The prices listed in the preceding table are an estimate for the services discussed. This summary is not a
warranty of final price. Estimates are subject to change if project specifications are changed or costs for outsourced
services change before a contract is executed.

QUALIFICATIONS
I have continually proven to be an industry leader for the delivery on industry consulting in infrastructure design, and
reorganization in the following ways:
Software/Design/Implementation/Training for over 100 mortgage companies and banks nationwide.
Project Management for the retail industry
Reorganization and Enterprise-Wide networking system for the automotive industry.

Past Clients have included:

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Bank of America, Charter One Bank, National City Mortgage, Bank of Boston, K-Mart, AT@T, Ford, GM.

CONCLUSION
I look forward to working with Federal Screw Works, Big Rapids MI and supporting your efforts to improve your high
quality product, employees and training and support services. I am confident that we can meet the challenges ahead,
and stand ready to partner with you in delivering an effective production and employee retention solution.
If you have questions on this proposal, feel free to contact me at your convenience by email at
oakleys1@fsuimail.ferris.edu or by phone at 231 567-3345. I will be in touch with you next week to arrange a followup conversation on the proposal.
Thank you for your consideration,

Scott T. Oakley
President Consulting Services

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APPENDIX I

FACT SHEET EMPLOYEES

U.S. Businesses spend billions of dollars recruiting and replacing employees.
Individually, it costs between $4,000 and $14,000 to replace an hourly
employee, and upwards of $40,000 to replace a manager. The U.S. Census
Bureau indicates the workforce will begin to experience a negative growth rate
beginning in the year 2015.
WHAT ARE THE TURNOVER REPLACEMENT COST BY INDUSTRY?

Construction - $14,500

Manufacturing - $14,500

Trade & Transportation - $12,500

Information - $19,500

Financial Activities - $18,000

Professional & Business - $15,500

Education & Health $14,000

Leisure & Hospitality - $7,000

Other Services - $12,750

All Private - $14,000

WHAT TO CONSIDER FOR EMPLOYEE RETENTION

Does your company have a retention strategy

Are supervisors/management/employees well trained

Is job satisfaction measured

Are there employee incentive plans in place

Is productivity measured

Are supervisors/management held accountable for retention

Are you attracting and keeping the skilled employees

WHAT ARE THE TURNOVER RATES BY INDUSTRY NATIONALLY? (AUG. 2014)

12

Private 4,160,000

Construction 272,000

Durable goods 130,000

Nondurable goods 97,000

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Manufacturing 227,000

Trade, transportation, and utilities 986,000

Retail trade 682,000

Professional and business services 932,000

Education and health services 485,000

Leisure and hospitality 808,000

Government 280,000

Leisure and hospitality 808,000

APPENDIX II

Recruiting ROI checklist

How many employees are employed by your company?
How many people did you hire during your last fiscal year?
How many people do you intend to hire during this fiscal year?
How many people do you intend to hire during the next fiscal year?
What is your average cost per new hire?
Do you have cost-per-hire information broken down by position, department, and
region?
What is your hiring-cycle time (in days)?
What variables does your company use to measure hiring-cycle time?
What is the annual turnover rate for your company?
How much do you spend annually on outside staffing firms ($000s)?
On retained recruiting firms?
On contingent recruiting firms?
On temporary placement firms?

How much do you spend annually on recruitment advertising (in dollars)?

On newspapers?
On advertising firms?
On Internet advertising?
On magazines and periodicals?

How much do you spend annually on travel, lodging, meals, and so on, in
association with your recruitment efforts? Include expenses for campus
recruitment events, on-campus and on-site interviews, and so on.
What types of special programs do you incorporate into your recruitment efforts?
Include virtual job fairs, radio promotions, public relations activities, recruiter
attendance at trade shows and at local community events.
How many special programs does your company commit to annually? Include
virtual job fairs, radio promotions, public relations activities, and recruiter
attendance at trade shows and at local community events.
How much do you spend annually on these special programs and events?
If your company recruits internationally, what are the annual costs (for example,
visa attainment and legal and expatriate-related matters)?
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How many career fairs does your company attend annually?

What is the average annual cost for attendance at these career fairs? Include
expenses for registration, booth space, travel, lodging, meals, and so on.
Does your company currently have or intend to implement an employee referral
program (ERP)?
If you have an active ERP, what is the average annual payment to employees for
each new hire?
How many new hires result from employee referrals on an annual basis?
Is your company actively involved in campus recruitment? If so, consider and
calculate the following:
On how many campuses does your organization recruit annually?
What are your annual college recruitment costs?
How many new hires result from these efforts?
Do you have an active internship or co-op program at these schools?
How many interns and co-op students are hired annually?
Do you intend to expand your campus recruitment efforts to additional campuses or
strengthen relations at your current campuses?

How much does your company spend annually on relocation?

How much does your company spend annually on signing bonuses and other
material perquisites?
What is the annual expenditure on third-party vendor services such as
background checks, credit checks, prescreening services, surveys, and so on?
How much does your company spend annually on external job postings, such as
the following:
Internet job boards
Paper-based bulletin boards
Kiosks

If applicable, what are the annual information technology charge-backs allocated

to your HR department?
If applicable, what are your HR departments annual charge-backs to other
departments for your recruitment services?
How many resumes are processed annually?
How many applications are processed annually?
How many full-time employees are allocated to the processing of resumes and
applications?
What is the average, fully burdened, hourly rate paid to the employees who
process resumes and applications?
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How many documents (resumes and applications) can one person process
per day?
What is the approximate percentage of the total resumes received from each
of the following sources:
Unsolicited mail?
Recruitment print advertising, including advertising in newspapers, magazines, and so
on?
Outside staffing firms?
Job fairs?
Campus recruitment?
Internet advertising and posting boards?
Employee referrals?

Of the resumes received, what percentage is received:

In paper form, including fax?
Through online applications?
Through corporate e-mail as an attached file?

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WORKS CITED

Boushey, Heather, Glynn, Sarah Jane, (2012). There are significant business costs to replacing
employees. Center for American Progress, (2012).

Job openings and labor turnover. Bureau of Labor Statistics U.S. Department of Labor August
(2014).

Smith, Gregory P., (2007). The cost of Employee turnover. Employment Policy Foundation tabulation
and analysis of Bureau of Labor Statistics, Employer Cost of Employee compensation data.
(2007).

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