Turnover Rate

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Turnover Rate

• Wal-Mart vs. Costco

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Contents
Introduction
1
Employee Benefits
2
Analysis of Data
3
Final Outcome
4
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Objective

• To understand the causation of high turnover
  rates between two large retailers
• Turnover rate is defined as the ratio of the
  number of workers that had to be replaced in a
  given time period to the average number of
  workers.

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Wal-Marts Background

• It was founded by Sam Walton in 1962 and
  incorporated on October 31, 1969.
• Wal-Mart is the largest private employer, the
  fourth largest commercial employer, and the
  largest grocery retailer as well as the largest
  toy seller in the United States.
• Wal-Marts primary focus is selling branded
  products at low cost to lower and middle class
  consumers who can shop for products and save at
  the same time.

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Wal-Marts Package

• Package including medical, dental, disability,
  and life insurance as well as an Associate stock
  purchase plan, profit sharing, 401(k) plan, an
  Associates discount and much more
• Only 43 percent of Wal-Marts employees are
  covered
• Health benefits for its employees is 27 percent
  less than industry average

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Wal-Mart Package Cont.

• Wal-Mart is a union free organization
• It closes any stores and departments that
  unionize
• Pays its employees slightly above the minimum
  wage in some areas, however far below the
  industry average.

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Wal-Marts Turnover
_ X 45.333

• Due to Wal-Marts package, they have a very high
  turnover rate
• The retail industry turnover rate is around
  34.6
• With the regression equation, the turnover rate
  in 2008 is 37.33

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Turnover Cost
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Costcos Background

• Costco is a wholesale corporation with the
  largest membership warehouse club.
• Since Costcos business model and size were
  similar to Price Club, it merged with Price Club
  in 1976.
• As of today Costco has a total of 523 locations
  including 388 in the United States and 131
  internationally.
• Costcos primary focus is to sell products in
  bulk at low prices.

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Costcos Package

• Package includes medical, dental, 401(k) plan,
  and high wage
• About 82 of its workers covered
• Costco only has about 18 of its employees
  unionized
• Costco provides its employees with salaries that
  they can actually live on

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Costcos Turnover
_ X 22.667

• Costcos turnover rate is not as high as Wal-Mart
• The retail industry turnover rate is around 34.6
• With the regression equation, the turnover rate
  in 2008 is 20

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Turnover Cost
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Results
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Improvement
Increase wages
Improve Turnover Rate
Offer a better compensation package
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Thank You !