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Employee Retention of Best Buy

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Pratik Kukreja
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Employee Retention of Best Buy - April 1st, 2011

Employee Retention of Best Buy : Best Buy Co., Inc. (NYSE: BBY) is a specialty retailer of consumer electronics in the United States, accounting for 19% of the market. It also operates in Mexico, Canada, China, Turkey and the United Kingdom.[2] The company's subsidiaries include Geek Squad, Magnolia Audio Video, Pacific Sales, and, in Canada operates under both the Best Buy and Future Shop label. Together these operate more than 1,150 stores in the United States, Puerto Rico, Canada, China,[3] Mexico, and Turkey. In addition, the company has rolled out over 100 Best Buy Express Automated Retail stores or "ZoomShops", operated by Zoom Systems, in airports and malls around the U.S.[4] The company's corporate headquarters are located in Richfield, Minnesota.
Best Buy was named "Company of the Year" by Forbes magazine in 2004,[5] "Specialty Retailer of the Decade" by Discount Store News in 2001,[6] ranked in the Top 10 of "America's Most Generous Corporations" by Forbes magazine in 2005 (based on 2004 giving),[7] and made Fortune magazine's List of Most Admired Companies in 2006.[8]
On March 9, 2009, Best Buy became the primary electronics retail store (online and bricks and mortar) in the eastern United States, after smaller rival Circuit City went out of business. Fry's Electronics remains a major competitor in the western United States. Many locations feature in-store pickup, which can be arranged through the company's website.[9]
Best Buy is also the largest retailer of cellular phones with phones from Verizon Wireless, AT&T Wireless, Sprint PCS, and T-Mobile. They also sell tablets such as the Dell Streak, Apple iPad, Huawei Ideos S7, and Samsung Galaxy Tab. Best Buy also has standalone Best Buy Mobile stores in shopping malls that only sell cellular phones, tablets, Apple iPods, laptops, notebooks, and wireless broadband cards. Best Buy Mobile is also the only cellular phone retailer to feature no mail-in rebates for all of their cellular phones.[citation needed]
In 2011, during the three-month period ended February 26, Best Buy saw its revenue and profits slide, but generated a profit of $651 million on revenue of $16.26 billion. In comparison to the same period in 2010, it tallied $16.55 billion in revenue and a $779 million profit.

I’m a business owner with employees and maybe you are too. Now think about this with me. Do you care how much time your employees put in, or do you care what they get done? Unless you run a law firm or another service business that bills strictly by the hour, you probably lean towards the latter. Then answer this question–do you care when your employees get their work done, or just that the work gets done by a certain time? Again, not all, but many companies would lean towards the latter.

You might be aware of small companies here and there that don’t have set working hours and focus on results rather than time put in, but now major companies like Best Buy are jumping on the bandwagon.


It’s called ROWE, or a “results-only work environment,” and it flies in the face of the generally accepted idea that full time employees need to work from 8am to 5pm in order to be worthy of their pay. Instead, it teaches the seemingly obvious concept that what employees get done is more important than how much time they put in and when.

Other large companies like IBM have had some sort of flex-time schedule for many of their employees for years. One of my professors at BYU who previously worked for IBM never had an office at IBM, he just worked from a home office and set his own hours. But no large company has ever instituted the practice for their entire workforce, which in the case of Best Buy means all their 4,000 corporate employees.

The practice doesn’t work for every situation. Obviously there would be a problem if Best Buy extended the option to its retail employees, because place and time are essential components of their job. Likewise restaurants, oil change stations, dry cleaners, and many other businesses clearly can’t offer their employees the choice of working when they want, where they want. My own father, as an optical engineer for NASA, couldn’t have worked very well from home because he often worked in a laboratory, and so his physical presence was an essential part of his job description. However, if he were still working today instead of enjoying retirement he could probably do 50-75% of his work remotely due to the Internet and increased use of computer modeling software.

But ROWE could work quite well for millions of employees across the United States, let alone the rest of the world. And by replacing the paradigm of an 8 to 5 workplace with results-oriented standards, I predict we would see a substantial increase in worker productivity. If all or much of what an employee has to do in order to make the boss happy is sit in his seat and look busy for 8 hours per day then we’ve got a “run out the clock” situation. But if we tell that same employee that he can take the rest of the day off as soon as he gets his work done, then we might see him finishing what previously would have taken days in a matter of a few hours, and he’ll be constantly looking for new ways to get work done faster.

focus on mutual respect between employees and supervisors, appropriate pay, benefits and rewards, as well as recognition of performance excellence, are key ingredients of an effective employee retention program. The importance of putting such actions into practice generally is well understood by most managers, but actually doing them takes time, so they are often left for another day. However, the payoff of focusing on employee retention—in terms of increased performance, productivity, employee morale and quality of work, plus a reduction in both turnover and employee-related problems—is well worth the investment of time and financial resources. The bottom line is that the organization will retain talented and motivated employees who truly want to be a part of the company and who are focused on making a contribution to the organization's overall success. See, Retaining Talent: A Guide to Analyzing and Managing Employee Turnover.

Business Case
Notwithstanding extremely adverse economic conditions, one of the most critical issues that organizations perennially face is how to retain the employees they want to keep. Even in the midst of a deep recession, companies must anticipate impending shortages of overall talent as well as a shortfall of employees with the specialized competencies needed to stay ahead of the competition. Organizations that systematically manage employee retention—both in good times and bad—will stand a greater chance of weathering such shortages. See, Thought Leaders Focus on Finding, Keeping Talent.

A focus on reducing turnover makes sense for three key reasons:
It is costly.
It affects the performance of an organization.
It may become increasingly difficult to manage as the availability of skilled employees decreases in the future.

Direct replacement costs can reach as high as 50% to 60% of an employee's annual salary, with total costs ranging from 90% to 200% of annual salary. See, Retaining Talent: A Guide to Analyzing and Managing Employee TurnoverandCost of Turnover. Examples include turnover costs of $102,000 for a journeyman machinist, $133,000 for an HR manager at an automotive manufacturer and $150,000 for an accounting professional. See, Retaining Intellectual Capital in the 21st Century. In addition to the obvious direct costs (e.g., accrued paid time offand replacement costs), there are numerous indirect costs (e.g., disruptions to team-based work, lost clients, decreases in overall service or product quality, etc.).

Turnover costs can have a significant negative impact on a company's performance. One study estimated that turnover-related costs represent more than 12% of pre-tax income for the average company and nearly 40% for companies at the 75th percentile for turnover rate. See, Driving the Bottom Line. However, not all turnover is harmful—it may, instead, generate some important benefits to the organization (e.g., the new replacement hire may turn out to be more productive or skilled than the previous employee). See, What Types of Skilled Workers Is Your Organization Concerned About Retaining: A SHRM Poll.

Drivers of Employee Retention and Turnover
Devising effective employee retention strategies requires organizations to understand both why employees leave organizations and why they stay. See, What Do Employees Want, Not Always What HR Thinks.

SHRM members who wish to receive additional information and resources on this topic via a one-time e-mail message may go to SHRM's Express Request service and select any of the following key terms: Reasons for Turnover; Employee Engagement.


Benefits well beyond a paycheck.
Working at Best Buy definitely has its perks. What you get for working at Best Buy is based on a comprehensive Rewards strategy, which includes a combination of pay, benefits, work/life options and professional-development opportunities.

Our health and wealth benefits programs are available to employees and their spouses/same-gender domestic partners and dependents. For full-time employees, health benefits include medical, dental, vision, life and disability, along with health-care and dependent-care spending accounts. Wealth benefits include 401(k) accounts, the Employee Stock Purchase Plan and bonus/incentive programs for eligible roles.

But the benefits don't stop there. Don't forget the excellent employee discount, along with generous time-off programs, tuition assistance, adoption assistance and vendor accommodation programs.

The data to help a company determine which broad-based strategies to implement typically come from retention research, best— or effective— practice review and benchmarking surveys.
Retention research can shed valuable light on the primary drivers of turnover. Attendance at conferences and membership in professional associations such as SHRM can also provide access to the latest research on turnover and retention.
Best/effective practices encompass the strategies that other organizations are using and are finding effective or ineffective.
Benchmarking surveys can provide information about where a company stands on issues such as pay, benefits, bonus plans and the like.

Targeted strategies
Targeted strategies are based on data from several key sources, including organizational exitinterviews, post-exit interviews, employee focus groups, predictive turnover studies and other qualitative studies. This information can lead an organization to determine more specifically where a problem exists and develop highly relevant and linked strategies to address the issue (e.g., if female professionals are departing the organization in significant numbers, a company could review common reasons that women give for leaving a company and develop strategies to specifically deal with this group of employees). See, Some Moms Would Take Pay Cut for Time With Kids, What Are Some Innovative Ways to Retain High-Tech Employees?and Creative Approaches to Employee Retention.
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Last edited by bhautik.kawa; July 19th, 2016 at 05:44 PM..
   
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