Natural Entrepreneur: Employees are a Dime a Dozen, Right?

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Employees are a Dime a Dozen, Right?

Now that you've hired 'em, keep 'em!

-- by Delise West, Human Resource Partners LLC, Dover, NH

Some turnover can be healthy for an organization, but if a constant employee churn is occurring at your business it’s time to examine why and start focusing on how to retain your employees who are the key to your business’ success.

Sally Smith has just given you notice that her last day of employment is in two weeks. “Fine” you think, "I can find someone to replace her. Employees are a dime a dozen, right?" Then comes the “uh oh” moment. Who will oversee customer relations, product management, fix the copier and oh yes, make sure you get to the airport on time?! Sally is the “glue” in your organization, the go-to person for just about everything. She is also not the only person at your company who has exited recently and you may be wondering, what is this really costing me and how do I stop it?

The Bureau of Labor Statistics report dated November 9, 2004, cites that employee turnover in the U.S. averages about 20%. Employee retention is a key component for a successful business. Even powerhouses like Morningstar have included employee satisfaction/retention (workplace culture) as part of their grading system for funds they evaluate. So let's review the cost of employee turnover, including some hidden costs you may not have considered as well as tools to help you retain your employees.

I discovered a nifty calculator that will auto-calc employee turnover figures for you http://www.advantagehiring.com/calculators/calc_turnover.asp Calculation tools like this however only scratch the surface. The complete picture lies in the hidden costs of turnover such as the time it takes to recruit a replacement and the time it takes to get your new employee trained. Other hidden costs can include decreased productivity, decreased customer service, lost business, reduced employee morale and the list goes on.

Now that you understand what departing employees are really costing your business, let's get serious about learning why your employees are leaving.

If you are not conducting an in-depth “exit interview” with each departing employee, you are missing an opportunity to learn how to plug the dam. Many employees give their reason for resignation as, “I have a better offer that I just couldn’t pass up.” This may seem like a logical reason for leaving but take a minute to ask yourself, why would an employee elect to look for a new job when research shows that most people loath the process of looking for a job? For some people it’s right up there with death and taxes. Take the time to find out the real reason why they started looking for another job in the first place.

Now that you have gathered data from the exit interviews, it is time to apply that data and work on retaining those employees who are still with you.

Employee retention is something you have to work at. It’s not just about bringing in donuts every Monday, or giving employees’ bonuses. It is about listening to employee’s and letting them know you heard them by taking action. You may find some exciting by-products when you focus on trying to retain your employees. I conducted an employee satisfaction survey for a client and because the client listened and took action to their employee’s input, they realized a 20% increase in sales! Happy employees equal productive employees, it's as simple as that.

Why do employees stay?

Research from a favorite book of mine called “Love ’Em or Lose ’Em Getting Good People to Stay” (by Beverly Kaye and Sharon Jordan-Evans) cites “career growth, learning and development” as the number one reason people stay at their jobs. The big surprise in all the research I’ve read shows again and again that “fair pay and benefits” rarely makes the top 10 of why people stay at their job. Yet time after time I see management try to retain employees with money, thinking this will “fix” the problem of employee retention. The data shows nothing could be further from the truth and this is just a temporary solution.

So take the time to ask your employees “what keeps you here?” before they are walking out the door. It will save you time and money in the long run and it will help you build a company where people want to be, including you!

Delise West is founder of Human Resource Partners LLC, a firm specializing in outsourced human resources services for small business. To contact her send an email to delise@h-rpartners.com, or call her at 603.749.8989. To learn more visit www.h-rpartners.com

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