In survey after survey, most business owners agree on one thing: Retaining the best employees ensures customer satisfaction, sales performance, and happy co-workers. If so many employers know this, why do they let great employees get away?
For one thing, there’s a disconnect between knowing something and understanding it. For another, coming up with incentives that won’t break the budget can be challenging.
Culture counts
It’s no secret that adopting a company culture of empowerment, trust, and collaboration creates a workplace that attracts talent. Jamie Seeker, principal consultant for business-management firm Seeker Solution, advises implementing the “two rules” amendment: One, be respectful, considerate and kind, even when you disagree, and two, always act in the company’s best interest.
Seeker believes relentless pursuit of the two rules provides a basis for fostering a work environment with less drama, fighting, grudges, wasted time, and employee turnover. And throw out the antiquated requirement that employees seek approval for absences. “It’s awkward having to ask a manager’s permission to take time off,” Seeker said. “We don’t clock you in and out each day, so why should we track days off?”
A potential solution? Let employees make their own schedules. That may sound utopian, but focus group studies have shown allowing employees to coordinate time off with their clients or customers and team works well. “If company guidelines require X amount of hours spent per week per client, you’ll go a long way letting employees schedule at their discretion,” said Seeker.
Be SMART
Research industry wages before negotiating with employees, but remember: In the long run, investing in your human capital makes financial sense. Using the SMART model (specific, measurable, attainable, realistic, time-bound) to set expectations and goals is…well, smart. In fact, Seeker has used the method as a core solution during the fifteen years she has consulted with large, medium, and small businesses. Last year, when she segued into the cannabis industry, she was particularly eager to share SMART.
“Using goals and holding employees accountable is paramount—but do it by using data, not emotion,” she said. “Make sure they have the tools they need to do their job. When systems are constantly down and they are having to spend the majority of their time troubleshooting because of inefficient or outdated systems, they become frustrated. All the wasted time lost in the inefficiencies goes straight to your bottom line.”
When used properly, SMART will expose unfavorable behavior and underperformance, the first indicators something needs to be addressed. Although it is easy to assume underperformance lies with the employee, the core issue may be more systemic. “Remember, employees don’t quit jobs. They quit managers,” Seeker said.
Offer perks
When it comes to value-added services, providing things like gym memberships, continuing education reimbursement, group fitness classes, or bonus and reward opportunities are important factors when employees are deciding whether to stay or go.
Also consider allowing employees the option of working remotely. Studies show more than 80 percent of employees consider telecommuting a perk. “Telecommuting is proven to increase employee output and productivity, positively impacting your bottom line,” said Seeker.
Profit-sharing, while not for every company, not only serves as a perk but also cultivates a sense of buy-in for the team. “When the company is profitable, we are all profitable” is something every employee can grasp. “It’s a great alternative to company bonuses, which have the potential to foster entitlement, versus black-and-white, defined profit-sharing metrics,” Seeker said. “This is ideal for startups and fast-growing industries such as cannabis.”
Mind the budget
Studies have shown the most common employee complaints in exit interviews are lack of performance feedback, no financial incentive, and lack of clarity about expectations. Studies also indicate poor communication from management and lack of leadership are the most common causes of employee turnover. A good way to minimize both sets of issues is to create transparent communication standards, policies, and expectations, and institute a 360-degree review process. “Offering 360-degree transparency with opportunities for bonuses and employee incentives aids in securing motivated new-hires and retaining top talent,” said Seeker. “Be the boss everyone wants to come to with questions and for guidance, not the one they fear. Praise the good and handle the bad in a reasonable manner.”
Before letting a great employee leave, remember: Lost productivity, a learning curve, and other, less-easily-quantifiable adjustments mean new employees can cost 50 percent to 75 percent more during their first year than retaining the previous employee would have cost.
“You must dedicate company resources to keep your current staff, or you will be spending those resources in replacing them,” Seeker said.
Train
Employee training programs aren’t only about retention. They also help improve skills and abilities that greatly affect the bottom line. When employees are more efficient, they are more productive. “When employees learn and grow in their craft, they save the company in labor,” Seeker said. “Of course, when employees experience growth and see continuous improvement in their performance, as well as the company’s, they have increased job satisfaction, too.”
Provide opportunity and value
“Studies show that newer employees want opportunities, while veterans want to feel valued,” Seeker pointed out. She added that when examining the engagement and retention drivers of differently tenured employees, two things become clear: The longer an employee works for an organization, the more they need to feel valued by their leaders. Newer employees, on the other hand, are more driven by professional growth and career development opportunities.
