In my last posting I identified how to hire the right people and who you might want to avoid. In this post we’ll discuss keeping good people. Some businesses just seem to suffer from continual turnover of the staff, others appear to be training grounds for other businesses in their field.
One fact of business …. it is immensely cheaper to keep good people than to find good or better replacements. First we’ll take a look at the top 5 reasons why people might leave in the first place.
Top 5 reasons why employees leave.
- Higher Pay. Surveys consistently show that the overall #1 reasons employees leave is compensation. It is interesting to note that many times this is a result of “pay compression”. This compression exists when there appears to be very little difference in pay between top, mid and bottom performers. You know the scenario, everyone gets an automatic 3% raise and there are little in terms of substantive evaluation. The job only appears to be worth a tight salary range. Add all sorts of benefits into this discussion of total compensation.
- Below Market. This is very similar to the one above but looks a little different to the employee. In this case the employee has access to surveys that show they are paid well below market rates. Many times you don’t need a survey, just find out what newly hired employees in the same company are being paid for the same job. Not surprisingly, the employee finds out that their 7 years of loyalty and excellent appraisals pays much less than risky new hires.
- Over or Under Managed. In this case it’s either they are being micro-managed and there is little room for growth, or they have little communication and direction from a manager. It’s no mystery that employees actually like to be properly managed and crave for leadership. To me, excessive turn-over is a manager problem.
- Overall Communication. Communication or the lack of, is one of the key reasons employees feel dissatisfied with their job. How well am I doing? I have no idea because no one tells me. All employees from top to bottom like to know both how they are performing and how the overall business is doing. Why, it’s a matter of safety to them. It builds trust when these things are communicated.
- The Environment. What is the workplace like, is the employee comfortable, is it professional? Is there too much drama, employee in-fighting and low moral? If so I can guarantee you’ll lose good people quickly.
Ways to keep good people
- Actually it’s quite easy, just deal with the top 5 reasons why they might leave.
- Let’s tackle Higher Pay. Although employees might say this is the number one reason for leaving, it may not have started them looking in first place. Communicate to each employee upfront and on a continual basis what the business’s overall compensation plan is for the position being discussed. Can the company provide a growth path for excellent performers?
- Many employees will sacrifice pay for other items they feel are valuable to them. For example, the security of a long term job, with a company that “treats them well”. This tends to be the case for small or mid-size firms who just can’t match the compensation for big city, big companies. There are many non-compensation factors that keep good people on-board.
- Give employees “real jobs”, those that have responsibilities, the ability to be recognized publically for a job well done. Provide the best management you can, don’t knowingly let a poor manager cost you people.
- Have fun, employees what jobs that are fun. I know it sounds corny and you run a professional business that is just too “out-of-place” to allow “fun”. You are wrong. Every business can find ways to allow their employees to become engaged in fun activities and functions. Conduct a contest, hand out simple goofy awards, those types of things. Kool-Aid at lunch contests. Just ask some of your more outgoing employees what might be fun and let them run with it.
- Never stop communicating. It’s just amazing that all business people believe they are good communicators, that communication is essential and that employees what consistent communications. Then they just don’t do it, they are just too busy to consistently communicate. Hold regular company meetings; allow both managers and staff to talk about accomplishments. Constantly tell them what is going on, good news and bad news. They are much better off hearing the good and bad from you than others who will get the details a little wrong.