High Turnover Antidote: Hire Employees With Disabilities

Summary:
Losing good employees is a terrible drain on a company. Among the most economical solutions to high turnover: hiring and retaining qualified employees with disabilities.

The Challenge Facing Employers Today

You Have to Spend Money to Make Money

Disabled Workers: Economical Way to Fill the Need


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:

1. 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.
   
   
2. "On average, U.S. companies experience 50 percent turnover every four years," says Sage Learning Systems in a Microsoft Word document containing a list of Facts and Figures about Training, Work and Jobs.
   
   
3. 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 PDF document: 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.


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