Case Study MEMO
to: | Audrey Redford, BECO 4310--002 |
from: | Lauren Estrada |
date: | February 13, 2015 |
RE: | Enterprise Rent-A-car |
There is an industry motto that states, “there are two types of car rental companies. Those who lose money and Enterprise”. Enterprise Rent-A-Car was started in 1957 in St. Louis, Missouri by Jack Taylor. Taylor founded the company offices in neighborhoods, and not at airports, because he believed that the Americans would welcome local option for rental cars when their vehicles were repaired. In 2010, the company had more than 6,000 rental locations in the United States and 850,000 fleet vehicles in operation. Enterprise Holdings ...view middle of the document...
I would like to suggest that Enterprise start "overpaying" their new hires.
I believe that if Enterprise decides to make their new hire wages more profitable, in this market, they will have less turnover because they can appreciate the value of what enterprise is doing for them. The case states that their training program is like "getting an MBA without the IOU", which I think brilliant, but I know for a fact after interviewing with them they only pay their new hires ten dollars an hour. This is a very reasonable and comfortable amount, but if you look at other companies that hire straight-out-of-college graduates, you can expect to see them making between fifteen and twenty dollars an hour. This is where Enterprise's turnover problem lies. From the case you can gather that Enterprise has a competitive environment and that their employees have to work together to be rewarded. I believe this wards higher pay because you are literally going to be paying your new hires to be more innovative and more competitive. Henry Ford's "overpayment" concept helped lower his turnover rate from 370 percent to 16 percent, and had a productivity...