Total Cost To Reward And Retain Employees

As we mentioned in the textbook, there are numerous other ratios that can be calculated and analyzed. The American Productivity & Control Center (APQC) is advocating a new ratio, the total cost to reward and retain employees (TCRRE). This ratio is calculated by summing costs for compensation, benefits, payroll processing, award/incentive administration, and employee assistance, divided by sales. In using this ratio, APQC argues that a low TCRRE ratio may indicate that a company may be spending too little on employees, which can result in lower morale or employee satisfaction. However, as with most other ratios, there is no absolute measure for this ratio. In this case, the ratio is determined in large part due to the company's size, culture, internal reward, and retention practices.