Treat Employees Like a Profit Centre and Prosper!
Written by Fernie Black
How often do you find yourself thinking “why can’t I hold on to my employees? And why is it that it’s the good ones that leave and the ones I wish would go are still hanging around”. Some turnover is healthy as when you terminate employees engaged in presenteeism or are toxic to your culture. High turnover, on the other hand, is unhealthy and can prove to be a deadly blow to the success of a company. Many business owners and managers have said that the revolving door syndrome is the one recurring workplace issue that keeps them awake at night.
Finding the balance between healthy and unhealthy turnover is the challenge and maintaining a high level of employee retention is the key to a successful business. One of the best approaches to keep you focused on retention so you don’t have to worry about high turnover is to minimize miss hiring – that’s half the battle to fixing retention problems. If you hire right the first time by hiring for attitude and overall fit, you’ll seldom have to worry about getting rid of poor employees and your retention rates will soar.
Not being able to hold onto good employees is a symptom of not only poor hiring practices but poor employee relations practices and in general poor management practices. For many owners and managers that harsh reality may be a hard pill to swallow. It’s reality check time. If you are suffering from low employee retention or high employee retention of the wrong people, you need to not only heed the advice of human resources and management experts but you must take corrective action now to protect your business.
Start by taking stock of your business practices and management style. Ask yourself these tough questions and be brutally honest with your answers. Do I:
- hire the wrong people?
- treat employees fairly and respectfully?
- pay competitively – at or above market rate?
- value and recognize the work employees do?
- give employees responsibility and autonomy? communicate, communicate, communicate with staff?
- nurture employee trust?
- give constructive feedback?
- create a fun place to work?
- challenge employees?
- provide development opportunities?
- hold employees accountable?
- terminate underperformers and toxic employees promptly?
- have clear workplace and position expectations and purpose?
- have a clear vision, mission and values that are consistent with management practices and behavior?
- provide the resources for employees to do their job well?
- know what drives each employee - intrinsically or extrinsically motivated?
- truly care about employees?
- look for ways to innovate?
And, finally, am I stuck in doing things the same way, am I comfortable with the status quo?
In today’s fast changing society and market, inertia will wreak havoc in a business that is slow to change with the times. Some argue that employees of today are tougher to manage than those of yesteryear. Regardless of your belief one thing is for certain – engage employees or become extinct!
Next to hiring right, overall employee engagement has proven to be the best response to the second half of the retention challenge. Employee engagement is directly attributable to management practices and behaviour. Start now to engage employees. Survey employees by asking: What would make you happy on the job? Why do you stay? Why would you leave? Do you know what the purpose of your job, team and company is? How do you want to be treated? What do you need from the workplace? A word of caution – be prepared to act on some of the suggestions otherwise doing this exercise will have negative ramifications. Throughout this process keep in mind, just like customers, it’s a lot easier and cost effective to retain good employees than hire new ones.
Dan Pink in his latest book, DRIVE, studied and analyzed years of social science research about human behaviour that definitively demonstrates that ‘carrot and stick’ extrinsic motivators (monetary rewards) works with routine physical work especially piece work type of production but has little effect on the type of work that most people do today - work that is cognitive, creative, conceptual and industrious. Dan Pink states that employees today tend to be driven by intrinsic motivation and amongst other things want to be engaged at work. The author concludes that 3 elements of engagement at work are autonomy, mastery and purpose. Research shows that once an employee’s basic needs have been met, employee engagement leads to higher retention rates. Ask anyone who has made a lateral move to another company or even another department - extrinsic rewards only goes so far before it loses its effect.
Do you know what your turnover rate is - for your industry, for your organization, for your department? Take a gauge and work hard to ensure you are always below that number - preferably at the low end of the scale. It has been proven that successful company’s profit margins, amongst other things, are directly tied to high levels of customer satisfaction. And, there is a correlation between customer satisfaction and employee satisfaction. Research also demonstrates that there is a correlation between a fully engaged and satisfied workforce and higher employee retention rates. Just like satisfied and happy customers don’t leave, satisfied and happy employees stay. Think of employees not as a cost centre but as a profit centre. When you couple those factors together that provides a very strong business case as to why companies need to hire right and then treat employees right - take care of your employees and they will take care of your customers and your bottom line!
The Top Twelve Retention Strategies:
- Hire for attitude and fit with the position, team and culture
- Treat employees right – respectfully, fairly and consistently
- Give employees autonomy and hold them accountable – fear not, if you hire right, your employees will accept responsibility and do the right thing
- Build a culture of appreciation that provides immediate recognition – personalize rewards and recognition as one size does not fit all
- Focus on intrinsically motivating non-monetary rewards – be creative and resourceful
- Create a fun culture – build in time for socializing and fun
- Ensure managers make realistic promises and keep them – do as you say, and say as you do
- Give employees the tools to do the job – resources such as time, a team, systems
- Communicate with staff and provide feedback – be open, honest, transparent and consistent
- At minimum compensate competitively and fairly – if possible structure a compensation & rewards program that is at the top end of the industry standard (you will reap the benefits tenfold)
- Provide opportunities for growth – provide challenges, offer training and professional development activities
- Demonstrate that you truly care about your employees and the community – their wellbeing, their families wellbeing, and encourage life balance and service to others