In today’s competitive job market, employee turnover is becoming an increasing concern for today’s business owners, especially since high employee turnover hurts a company’s bottom line. Experts estimate it costs upwards of twice an employee’s salary to find and train a replacement. And frequent turnover can damage morale among remaining employees, thereby hurting the corporate culture.
In this article we will discuss how you can safeguard the capital you’ve invested in your employees and their talent.
Hire The Right People From The Start
Most experts agree, hiring the right employees from the start is the single best way to reduce employee turnover. Interview and vet candidates carefully, not just to ensure they have the right skills but also that they fit well with the company culture, managers and co-workers.
Ensure The Right Compensation, and Competitive Benefits Are Set In Place
Work with human resources to get current data on industry pay packages, and get creative when necessary with benefits, flexible work schedules and bonus structures. Review compensation and benefits packages at least annually. Pay attention to trends in the marketplace and have HR update you.
Increasingly, people looking for work don’t just consider the salary being offered by a potential employer, but also the benefits provided. By making available affordable benefits like health insurance, dental insurance, retirement savings plans, and, as mentioned above, stock options, you can make a job at your company more appealing than one at a competitor’s. Be aware of the benefits your biggest competitors are offering their employees. If they start offering more generous benefits than you, they may be able to steal some of your best employees, so don’t let them get the jump on you! Also, ensuring your employees have decent health coverage can be a wise investment in the long run — healthy employees are productive employees.
Pay attention to employees’ personal needs and offer more flexibility where you can. Consider offering telecommuting, compressed schedules or on-site or back-up daycare. Today’s employees crave a flexible life/work balance. A Boston College Center for Work & Family study found that 76% of managers and 80% of employees indicated that flexible work arrangements had positive effects on retention. And more and more companies are aware of this and are changing their perks/benefits accordingly. That means, if you’re not offering employees flexibility around work hours and locations, they might easily leave you for someone who will.
Maintain A Positive Work Environment
Managers often overlook how important a positive work environment is for staffers, and how far meaningful recognition and praise from managers can go to achieve that. Awards, recognition and praise might just be the single most cost-effective way to maintain a happy, productive workforce.
Simple emails of praise at the completion of a project, monthly memos outlining achievements of your team to the wider division, and peer-recognition programs are all ways to inject some positive feedback into a workforce. Also, consider reporting accomplishments up the chain. A thank you note to the employee is good. Copying higher-ups make that note even more effective.
To make it easier to identify accomplishments, ask your team for weekly or monthly updates of their achievements. Ask for specific numbers, examples or emails of praise from co-workers or customers.
Outline Challenging, Clear Career Paths
It’s not enough to simply ‘’offer’’ the potential for advancement — it’s also important to make sure that employees understand how they can advance in your business. Employees want to know where they could be headed and how they can get there. Annual reviews or mid-year check-ins are one obvious venue for these discussions, but you should also encourage workers to come to you with career questions and wishes throughout the year.
Try to promote from within your workforce, rather than recruiting outsiders into management roles. While this may sometimes be unavoidable, hiring an outsider to fill a management vacancy when there are qualified employees with years of experience who could conceivably do the job, can give the impression that you don’t care about your employees’ accomplishments.
Fire People Who Don’t Fit
As the old saying goes, “a stitch in time, saves nine.” The same goes for cutting employees loose when necessary. No matter how effective they might be at their actual work, an employee who is a bad fit is bad for your culture, and as a result, creates “culture debt.” They will do more damage than good by poisoning the well of your company. Cut them loose.
Pay More (Or Offer A Path To A Raise)
In the free marketplace, cash is king. If you’re willing to pay your employees more than a competitor would, they’ll be less likely to leave for other work. An added benefit of increasing your employees’ pay is that it allows you to ask more of them — well-paid employees have an incentive to work harder and commit themselves to their job, while employees who are making relatively little won’t usually have the same level of dedication or loyalty.
If you don’t have the cash to pay your employees more than the competition, be creative. For instance, offering company stock options or equity plans is a relatively low-cost way to increase the long-term earning potential of your employees. As an added benefit, these sorts of options give employees a real financial stake in the company — if they work hard and help the company do well, their stock value will go up, and they’ll make money.
Conduct Regular Employee Reviews
If your business is suffering from high employee turnover, one of the best reasons to find out why is simply to ask your employees. Having regular review sessions in which you (or another qualified person) meet with each employee and talk about what they like and dislike about their job is a great way to make sure the employees feel valued and see their concerns being acknowledged. If you don’t feel that you’re up to this task as a manager, don’t worry! For a fee, a third-party HR agency can handle the process for you.
As an added benefit, these review sessions can also give you great ideas. For instance, if one employee who’s sick of sitting at her desk all day has a great idea for putting a standing desk in the break room, doing this might make her significantly more happy in her job for a relatively small one-time cost.
Your reviews should involve a healthy back-and-forth of information sharing. Don’t use reviews merely as an opportunity to critique your employees — they should also be an opportunity for your employees to critique you. Be willing to “meet your employees in the middle” as long as their demands are reasonable and their intentions are good.
Conduct Exit Interviews
Even friendly, open companies with great work environments occasionally have to let people go. When your business has to do this, take the opportunity to conduct a thorough exit interview with the employee being dismissed before he’s gone for good. Some business experts have found that employees are more willing to be candid at exit interviews, though others have found that some employees may be less critical in hopes of getting a good recommendation. In any case, an exit interview is your last chance to learn what went wrong with an unhappy or unproductive employee, so take advantage of it. Below are just a few of the sorts of questions you’ll want to consider asking:
- “What was your favourite/least favourite part of the job?”
- “Was there anything that made it difficult for you to perform your duties properly?”
- “In the future, how could we avoid the types of problems you faced in your job?”
- “Is there anything you wish the company had done that it didn’t do?”
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