People are the engine that powers businesses. Of course, this isn’t breaking news. The problem is that we all talk about it more often than we show it. Anyway, “people”, in this case, can be your employees or customers.
Today, I’m going to talk about your employees and what it means to foster a healthy relationship with them, to create a conducive work environment for them, and ultimately to retain them.
Employee retention… I probably should have put that last bit first, seeing as every other thing mentioned revolves around it. If you are a CEO or HR, I imagine trying to figure out how to retain your top gun makes you want to bang your head on concrete every morning. I know, it’s tough. Millennials are nasty, discontented sons of *******, hopping here and there as if the world belongs to them.
That’s the wrong thinking though.
What if I told you that your top guns are leaving because you aren’t doing enough to keep them? If you are anything like a long-time client of mine, you would probably laugh, “What’s this maniac talking about?”
Okay, calm down. Let’s back up a bit and think about this. Ask yourself these two pertinent questions:
- Do I want more of my staff to stay?
- Is that in my interest?
If your answer to those questions is “no”, then you should probably sell your business (if it’s worth anything), pack up, and go find a more astute CEO to work for. Should be an enlightening period of your life.
So why is “more of your employees staying” in your best interest? It’s simple: cutting down on turnover cost. In other words, it’s cost-effective.
Each time you have to replace an employee, you are looking at:
- Direct exit costs like unused sick time, payouts for accrued vacation time, contributions to healthcare coverage, and so on.
- Recruitment, onboarding, and training costs of new hires.
- Cost of learning and development
- Side effects like decreased productivity, loss of expertise, lowered moral in the workplace, and more.
- Cost of time with unfilled role
Now, let’s get down to numbers
According to a study by SHRM, it can take 50% to 60% of an employee’s annual salary to find a direct replacement. When you now factor in other costs and effects associated with turnover, you’d be looking at 90% to 200% of an employee’s annual salary.
So now that I have convinced you that retaining more of your employees is in your best interest, let’s dive into more pertinent questions.
- Are my staff happy?
- Will my top guns stay?
- What more can I do to keep them?
These are the questions smart CEOs and HRs ask themselves everyday. If your answers to these questions are favorable, chances are that your turnover rate is very low. I wish I can say the same for the other guy.
But let’s not point fingers now. I think we all can learn a thing or two from other people’s experiences. So whether you are that guy or the other guy, below are a handful of suggestions for maximizing employee retention that I share with my clients.
Offer Competitive Salary and Benefits
According to a recent Glassdoor survey, 45% of employees that quit mentioned salary as the top reason. Then another survey on employee retention saw 56% of employees saying that what keeps them in their job is healthcare and insurance concerns. Clearly, money matters, and if as a CEO you don’t offer your employees something comparable to other companies in your industry, you risk losing them.
Still money isn’t everything. There are a host of other ways to maximize employee retention.
Employ the Right Person
The survey by Glassdoor also discovered that about 35% of companies who hire new staff do so because they anticipate that a fraction of their current staff will quit in the coming year. It’s unfortunate, but this is a dilemma many CEOs face everyday.
So why not revamp your hiring process and hire the right people from the onset? Be as transparent as possible when hiring. Let applicants know what to expect from the onset. That way, they can genuinely decide on time if the job is for them or not. An ill-informed hire will most likely leave when they discover the job isn’t what they expected.
Life and Work Must Balance
A happy employee is one with a healthy balance between work and their personal life. Anything outside that leads to pain, frustration, and ultimately the gnawing impulse to quit.
As an employer, you must refrain from expecting your employees to function like robots. This can easily wear them out, thus translating to frustration, decreased productivity, and the said impulse to quit.
Instead, try your best to create a conducive work environment and also encourage a balance between their work and personal life.
How can you do this?
The answer is simple. By talking to your employees to find out what their pain points are. You can do this through a survey or direct feedback. You could also pay attention to industry trends to discover the top reasons employees become frustrated.
Then once you have done that, you take steps to alleviate any pain points you have discovered. This could mean a salary increment, offering better benefits, making sure your employees get a certain amount of weeks off each year. When your employee knows you have their best interest at heart, they will be happier on the job, they will give more, and they will be much less likely to quit.
Be a Leader, Not a Boss
Be someone your employees respect, not someone they fear. This doesn’t mean you should become best buddies with your staff. No. It means you should be a figure they can look up to. Bosses focus on numbers, leaders understand that their employees are their most important assets.
Keep Your Managers In Check
A bad manager is like a negative influence in any work environment. When your workers aren’t happy about your manager or feel your manager treats them unfairly, a good fraction of them is going to leave. This is why it’s important to always look beyond the technical aspects of the managerial position when hiring.
A good manager needs to have great people skills. They should be able to motivate different types of people. They should be skilled in conflict, stress, and crisis management. And they should be able to deal well with various personality traits.
Employee Engagement Goes a Long Way
Engagement is everything. When an employee is not actively engaged with the job, boredom and distraction set in and productivity falls. Soon, the impulse to quit follows. In fact, a poll by Gallup discovered that 73% of actively disengaged employees actively look for a new job while still on the old one.
This is every employer’s nightmare.
So what do you do? There’s no point in blaming your employee for being distracted on the job. Instead, you should remember that distraction is a product of lack of motivation. Then start working on ways to motivate your employees so they can be fully engaged with the job.
Make Your Employees Proud of Your Brand
Unfortunately, there’s no magic wand for doing this. You just need to do the age old hard work.
Everybody wants to be part of something grand and life changing. To retain your employees, why not turn your business into something grand and life changing, into something they can be proud of, something they wouldn’t want to abandon. You could start by offering quality products and services, creating a conducive work environment, and giving back to the community.
Tell me, what other strategies do you adopt to retain your employees? Please leave a note in the comment area. Thanks.
This post also appeared in Macaulay Gidado Medium Publication.