Imagine–you have been working late to finish an important project when one of your best employees walks into your office and tells you she has been offered a better job. This is the same person you handpicked, trained and recently gave a pay raise. As she turns to depart she says, “There are others thinking about leaving, too.”
What went wrong? How are you going to finish this project? Who will be next to leave? The dread is starting to sink in.
Employers face growing challenges finding and retaining people with the right skills. There are plenty of people looking for jobs, but it is harder to find people who have the right skills, work ethic and training to help employers stay competitive. The other issue facing employers is a growing population of unhappy and dissatisfied workers staying on the job. During the past three years, job dissatisfaction has jumped to the number one issue many employers encounter. This has long term implications to the competitiveness of businesses in the global marketplace.
The Cost of Employee Turnover
Each year businesses spend a ton of money recruiting, replacing and retraining new employees. They assume employee turnover is unavoidable and think there is very little they can do to prevent it. For the most part, organizations only focus on employee retention after they start experiencing a turnover problem.
Few businesses actually consider how much money they waste because of employee turnover and low job engagement. It takes 2.5 times their salary to replace a typical employee and replacing a senior manager costs the same as buying a Lexus. To replace a critical care nurse can run up to $185,000; and when a top sales person departs, it can cost millions. In spite of the staggering cost, few businesses have a formal retention program. How dumb is this?
Pay and benefits are important, but studies show many employees quit their jobs for other reasons. Obviously, a certain degree of employee turnover is unavoidable, but with a small amount of effort, organizations can make a major difference retaining key people and increasing job satisfaction. Your plan should address the following eight key components.
- Redesign your orientation program for new employees. The old saying, “You don’t get a second chance to make a good first impression” is true in this case. Organizations experience the highest level of turnover during the first 90 days on the job. The purpose of onboarding is to quickly assimilate the new person into the organization, so make the first critical days stand out as a positive experience. This is a great opportunity to make new hires feel proud to have chosen your organization as a great place to work.
- Hold people accountable for poor performance. Employee retention does not mean you retain everyone. Employees say one of the main reasons they stay is because they like the people they work with. No one wants to work with people who do not pull their weight. Those businesses that tolerate poor performance will drive off the good employees and be stuck with the bad ones.
- Soft skills are becoming the hard skills. Interpersonal skills are a critical element in retaining people and increasing job satisfaction. People want to feel management cares and is concerned for them as individuals. Yet, poor “soft skills” are one of the biggest factors driving people away. To build stronger bonds between the top management and employees, one corporate office practices something called the ‘Employee Scavenger Hunt.’ Once or twice a year, they give every executive or manager five names of employees. They find each person, meet them and learn about them as individuals. The process builds a better bond, improves communication and increases trust within the organization.
- Accelerate your internal progression program. For many people, learning new skills and advancing their career is just as important as the money they make. If they can’t move up they will move out. In a study by Linkage, Inc. more than 40 percent of the respondents said they would consider leaving their present employer for another job with the same benefits if that job provided better career development and greater challenges.
- Re-hire your employees. An emphasis on hiring new people can cause “older” employees to dis-engage, feel ignored, or forgotten. To combat this situation, consider reinterviewing all of your employees periodically. During the interview, review their training and development, ideas and suggestions, identify new skills acquired and review their pay and benefits.
- Complete a retention plan on your best employees. You must manage retention one employee at a time. Focus on the key jobs that have the most impact on profitability and productivity. Everyone has a different set of needs and expectations about their jobs. By conducting an individual retention profile, managers can quickly identify the employee’s unique motivations, goals, level of job satisfaction, as well as other expectations.
- Focus on the family. One small company gives their employees’ children a $50 Savings Bond twice a year when they get straight A’s on their report cards. Another survey of 1,000 companies showed half of them let workers stay home with mildly ill children without using vacation or sick days. Two-thirds permit flextime defined as allowing employees to adjust work hours on a daily basis.
- Identify and weed out poor managers. The relationship with the employee’s front-line manager is the most common reason people leave. As part of LaRosa’s employee retention strategy, all workers evaluate their bosses twice a year using a special report card. It asks the employees to give their managers a letter grade from A to D in four categories. Any score less than a “B” requires a specific comment from the employee. After it’s completed, they tabulate the comments and design action plans for improvement.
Greg Smith’s cutting-edge keynotes, consulting and training programs have helped businesses accelerate organizational performance, reduce turnover, increase sales, hire better people and deliver better customer service. As President and Lead Navigator of Chart Your Course International he has implemented professional development programs for thousands of organizations globally. He has authored nine informative books including his latest book Fired Up! Leading Your Organization to Achieve Exceptional Results. He lives in Conyers, Georgia. Sign up for his free Navigator Newsletter by visiting http://www.ChartCourse.com or call or call(800)821-2487 or(770)860-9464.
Greg Smith | Lead Navigator | 770-860-9464 | Chart Your Course International
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