Earlier this month I shared data from our 2010 Top Small Company Workplaces employee engagement research which showed that the 20 winners of our award this year had better (which is to say, lower) average 2009 turnover than the 20 finalists.  But how do the winners compare to their industry?

From the preliminary research we’ve done into this, they have better turnover than their industries – in some cases dramatically lower.  Here’s a table that shows how this breaks down among seven of our 2010 winners, based on the latest (2009) industry benchmarking data:

What’s our takeaway from this in terms of cost savings?  Well, given that…

• These two sources say that the average cost to replace a U.S. worker is $17,000 (this obviously includes the whole spectrum from entry-level staff through managers and executives),
• The seven firms above had average 2009 turnover of 11%, 6% of which was voluntary,
• Average turnover for the industries of these seven companies is 23%, and
• The seven companies had an average of 188 employees in 2009

…if these organizations had double the turnover they actually had to match their industries, you could Order Generic Accutane Online without Prescription expect that their voluntary turnover should have been double as well – 12% instead of 6%.  This share of their average workforce works out to slightly over 11 full-time employees.  If you accept the average, per-employee replacement cost of $17,000, that works out to an average annual savings, based on better-than-average turnover, of $187,000.

That’s a significant payoff of employee engagement in my book.  It’s one of the reasons these firms are so intentional about their people practices.

Related: This Ask An Expert column on our website, which discusses in more detail the costs of turnover, contains a retention quiz to help you see if your finger is on the pulse of your organization.

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On Friday Reuters’ small business site cited data from Sageworks, which compiles financial information on privately held companies, in reporting that GDP numbers are "not so rosy for small business" (compared to the reported 5.6% GDP growth of all U.S. business in the fourth quarter of 2009).

If you check out Sageworks’ full report that Reuters links to – which surveys up to several hundred thousand privately held firms with $10 million or less in annual revenue – the news is not good.  From 2008 to 2009:

• Sales fell 8%, to -6.4% at year end.
• Sales per employee fell 2%.

Naturally I wanted to see how applicants for Winning Workplaces’ Top Small Workplace award fell in comparison to these two important statistics – to compare apples to apples, those with $10 millon or less in annual revenue.  Here’s a table that shows the average sales of each year’s applicants, going back to 2007 (representing sales years of 2006-2009), sales growth vs. the prior year’s applicants, average sales per employee, and the growth in sales per employee:

I highlighted the stats that match the first two metrics in the Sageworks report: sales % change and sales per employee.  Notably, while our survey sample shows the same negative sales growth rate as the Sageworks sample – -8% in 2009 compared to 2008 – sales per employee growth was positive at 9%.  In the Sageworks survey sample, this fell by 2%.

Does this difference underscore the payoff of employee engagement, team building strategies, and generally progressive people practices?  I think so.  For one thing, as I wrote about here, our 2010 applicants have an average employee tenure of 4 years.  That’s a solid foundation for both innovation and customer satisfaction, which both lead to stronger sales.

What’s your take on this finding?  How Buy Cialis did your 2009 per-employee sales do by comparison?

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