Running Head: RIORDAN BENCHMARKING
University of Phoenix
MBA/530– Human Capital Development
September 18, 2008
Businesses across North America are faced with similar challenges as they expand and adapt to the needs of society. Some businesses choose to learn from others successes and failures, while others ignore the warning signs and in turn fail themselves. A successful business must go through benchmarking processes and undergo an unbiased evaluation in order to improve overall production. This benchmarking process was done for the Riordan Company. It is evident that the company faces three major challenges: a high and costly turnover rate, the training and developing of its future leaders, and fostering an employee friendly environment with two-fold communication. These challenges are not unique and can be remedied by learning from companies such as Bank of America, The Tuba City Regional Health Care Corporation and Southwest Airlines.
One of the problems Riordan is facing is an increase in the turnover rate. The turnover rate at Riordan has more than doubled from 2001/02 to 2003/04 (University of Phoenix, 2008). Bank of America faced similar challenges in regards to high employee turnover and increasing retention of high quality employees. According to the U.S. Bureau of Labor Statistics, voluntary turnover in the U.S. is 23.4 percent annually. “It is estimated that replacing an employee costs a business one half to five times the employee’s annual salary” (Robinson, 2008). High turnover has other costs that are harder to estimate the amount of loss to the company. These costs “include customer service disruption, emotional costs, loss of morale, loss of experience, burnout and absenteeism among remaining employees, etc” (Adidam, 2006, p.138). “It is difficult for a company that employs new people every few months to operate in a smooth and efficient manner because it is always training employees” (Will, 2001). One...