Hospira Business Leadership Academy: Proving Employee Retention's Impact on Bottom Line
In the fall of 2005, Hospira’s R&D, M&RA senior leadership asked LFCE to help develop a comprehensive leadership training program. Aimed at retaining key employees, the program would build managers’ tactical and strategic skills. The first group of managers graduated from the eight-day Hospira Business Leadership Academy in February 2006.
Since its launch, 130 individuals have successfully completed the program. Moreover, results for 2006 show that the Business Leadership Academy helped retain 22 key employees. In addition, for each dollar spent on the program, Hospira earned a direct return on learning investment (ROLI) of $1.35 and an indirect ROLI of $5.41. The Corporate Leadership Council, with expertise in retention issues, defines direct savings as direct salary replacement costs, while indirect costs include recruiting, hiring of temporary employees, lost productivity, and costs associated with training new employees.
Julie Dexter, Hospira’s Manager–Talent Development, and Susan Vece, LFCE Director and Business Leadership Academy Project Manager, recently shared these findings with the Human Resources in Research and Development peer networking group hosted by consulting firm ORC Worldwide. These HR executives, accustomed to calculating the cost of employee turnover, were unfamiliar with connecting a key HR metric to an ROLI. They were most interested in the connection between the training and retention of key employees, and the measurable results the design team was able to demonstrate.
“Organizations instinctively know employee retention is critical for business success,” Vece explains. “What’s most significant here is that, from the outset, we partnered with Hospira to identify goals and measures that would enable us to quantify the impact the program would have on achieving the organization’s business objectives.” Among other things, the design team linked a specific business objective (e.g., retention) to specific tools taught in the program, identified and tracked relevant costs and benefits, and isolated measurable results of the program.
Hospira is pleased with the results. Says Dexter, “The feedback we’ve received from our senior management team was that the Business Leadership Academy has set the standard by which all other education programs will be measured.”
