Hanging onto your top people may be expensive, but it’s cheaper than losing them.
by Scott Davis
CEO, TrueSyncMedia and SocialMediaTV.com
In my last article I talked about the costs – often the hidden costs – of employee attrition. The bottom line: losing an employee is more expensive than most entrepreneurs realize. So how can you avoid the bleeding? What can you do to keep your people off Monster.com, Indeed.com and Craigslist?
Here are six tips that top-performing companies know about. They aren’t all easy, but they’re proven winners for businesses like yours.
1: Boost compensation. I know, this is the last thing you want to hear, because franchisors have to be keenly aware of things like cash flow. But for many workers, the unfortunate reality is that a dollar or two an hour can be a big deal. Even if they like you and the job, they may well bolt for what looks to you like an insignificant amount of money.
Think about the high-turnover, low-paying position we discussed last time. This person may be earning in the range of $10 an hour and the cost if he or she leaves could be, on average, around $3,300.
If this employee works 40 hours a week, a buck-an-hour bump is going to set you back a couple thousand dollars a year. If you’re obsessed with visible weekly costs, that’s not a fun number to contemplate, I know (especially when we’re talking about several employees instead of just one).
But what’s $3,300 minus $2,000, times the number of affected employees?
That’s just the basic cost. It doesn’t even factor in the upside associated with the vastly improved quality of work and customer service.
And it hopefully goes without saying that every benefit you can provide helps your chances of keeping your talent in your business and out of your competitor’s.
2: Communicate clearly. Few things can be more frustrating for an employee than the feeling they don’t know what’s expected of them. You go to work, you do your best, you think you’re meeting expectations, only to find out you’re not doing a good enough job at something you didn’t know you were supposed to be doing at all.
Poor employee communication breeds discontent, hurts performance and increases time spent on job sites. Just saying.
3: Encourage their input and ideas. You hired them to do a job, and they’re always pushing to do other things. They think X can be done better, or that you should be doing Y instead.
Not every idea is a good one, but employees who feel like their intelligence and experience is valued are going to commit more fully.
Even better, some of these employees are sharp. You never know when one of them is going to come up with something brilliant. All it takes is one game-changing thought from your workforce to generate profitable new business lines and cash-saving process efficiencies.
4: Fairness. Does this need saying? You can’t treat everyone the same, nor should you try. But perceptions of inequity are guaranteed turnover generators. Employee X sees employee Y getting paid more for the same work (especially if there are perceived gender or racial factors involved), and you have a flight risk. Jack screws up and gets yelled at, while Jill makes the same mistake and gets the kid-glove treatment? Jack will notice, and he’ll talk to everyone else in the building about it. Next thing you know your environment has gotten toxic.
5: Training. Workplace research repeatedly stresses the importance employees place on professional development activities. The reasons are obvious – it enhances their value. It also shows them how much you’re committed to their growth. In the end, a solid training program strengthens what they can do for you and your customers, and it also fosters loyalty.
6: Work-life balance. For most of your best people, work isn’t their lives. Work is how they afford their lives. A recent Deloitte survey, in fact, found that work-life balance was the #1 factor (other than – wait for it – compensation) for job-seekers and workers.
These talented people aren’t remotely interested in is a job that takes them away from their families, their community activities, their fitness and their hobbies. Sure, you work like crazy, but it’s your business.
Talk honestly and openly about where the job fits in their view of a perfect life. Then work with them to create a schedule where they can maximize their value to you as well as yours to them.
By the way, the research on time spent working is really clear. Once you get past a certain number of hours, the effects are counterproductive. You don’t get more productivity, which means there’s a point where you’re paying people for nothing. That’s bad ROI. Go Google the term [working longer hours counterproductive] and start reading.
These are just a few ideas for keeping your best people right where they are. Some of easy to implement, some a little trickier, but I promise if you get your employee relations right it will drive the bottom line and leave you with fewer headaches.
Let me know how it works out for you