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So you've finally trained a crack group of employees. They know your business. They go out to the job site with little guidance and get the job done right. They answer customers' questions well. They even come up with new ideas for how your business can run better. In short, they generate profits.
Now . . . how do you keep them from quitting for a competing business, or leaving to start their own business.
In these days of labor shortages, more and more employers are asking that question. "Talent is hot commodity these days," says Ian Jacobsen, president of Jacobsen Consulting Group, Sunnyvale, Calif. "People have choices as to where they can work. If you don't meet their needs, other employers will. There's simply no reason for them to stick around."
That's scary. No wonder retention has become a critical management issue. "When someone jumps ship, what does it really cost you." poses Jacobsen. "A lot more than just replacement cost. Consider the business you were not able to transact while you find and train a new person, and the delay in your business growth. And then think of what the ex-employee can do for your competition. When people who built your business leave, it really sets you back." Add to this the slim pickings that go with a tight labor market, and you're faced with a frightening situation for your business.
The bottom line is that it's much better — and easier — to retain people than to recruit them.
So how do you keep your staff from jumping ship. The obvious first answer is to raise wages. Certainly your compensation needs to match or exceed that of the competition.
"I pay a little differently than most people, and that's how I can attract really good people," says Larry Beers of Beers Hardwood Floors in Annapolis, Md. "Usually your high performance guys, the guys who you're likely to lose, are leaving for money."
But employers are finding that higher pay is not enough. "When you give unhappy employees more money, you have wealthier, unhappy employees,"says Dr. Alan Weiss, president of Summit Consulting in East Greenwich, R.I. "So you compound the problem by spending too much." Jacking up salaries, of course, can erode your profits. And you'll find that unhappy employees depart at the first opportunity when they find an employer who addresses their needs, even if the compensation level is lower.
Throwing money at the problem is not the only approach that offers a quick fix at the expense of long term success. "Today there are many 'flavors of the month' that address retention at a superficial level,"says Erik J. Van Slyke, senior manager in the human capital advisory services consulting area of Deloitte and Touche in New York. "We're talking everything from some type of deferred compensation, to stock options, to changing the benefit offerings. All of those things are wonderful ways of improving retention in the short term. The downside is that because they are solving symptoms, they don't end up really tapping into our ability to motivate people for the job itself."
The secret, says Van Slyke, is to create a work environment that motivates employees and offers benefits they want. Let's see what makes up such an environment:
Provide career growth
"The number one reason good people leave a company is because they feel they are no longer growing or expanding what they know," says Dr. William C. Byham, president of Development Dimensions International in Pittsburgh, Pa. "As long as people think they are still growing, they will stay with your company."
Sue Kaser, part owner of Klassic Hardwood Flooring in Cuyahoga Falls, Ohio, says her company offers training for employees over time. "We want everyone to learn everything," she says. They also have a vision of a long-term employee in mind at hiring time.
If you don't offer opportunities for career growth — even within the same job — then no combination of human resource solutions will help. Be sure to communicate your concerns about individual growth to each employee. "A big problem is that employers don't help people realize they are growing and the organization is helping. So employees don't see things in a context of growth," Byham says.
Talk with your people
What really motivates your people. What keeps them on board when competing employers use attractive deals to lure them away. You'll know the answer if you talk with your employees. Ask them about their life goals, what they like about their jobs, and what they don't like. Do this during regularly scheduled performance reviews, but also in more casual conversation.
A one-on-one conversation can be far more valuable than second guessing what your people want. "There are all sorts of research studies about personality types and their career preferences,"says Van Slyke. "The downside is that you don't always hit the mark exactly." Encouraging people to open up can reveal surprising needs. "An employee may want autonomy, or a chance to be creative, or a chance to influence others,"he says. Be aware that people often find it difficult to articulate what they want. So watch for clues in their performance on the job. Does Sam seem to come alive when you put him in charge of the sanding crew for a day. There's a clue that Sam is looking for a leadership role. That's something that Sam might not even think of telling you in your personal conversations.
President Marty Hammonds at Hammonds Wood Floors in San Antonio, Texas, has more than 30 years' experience in the industry and employee relations. He says that losing employees is in part caused by them not understanding job responsibilities, more than a case of them not wanting to work for a particular employer.
"If someone is ready to quit, it's usually due to frustration from one part of their job they feel unable to handle. These we're able to resolve — from then on, the stress is reduced," he explains.
Finally, be aware that off-the-job activities are becoming more important to individuals, especially high-performance ones. Just as important as limiting the hours of work is allowing the employee to determine the daily schedule. "Flexi-hours are here to stay," says Don Schackne, president of Personnel Management and Administration Associates in Delaware,Ohio. "They give a feeling of control to individuals. And there is a measure of comfort in knowing that if an emergency arises, the individual can adjust the work schedule without being penalized."
If all of this sounds as though people are demanding that their personal lives be taken as seriously as their work, you are correct. "The new emphasis on life balance is real; it's not some kind of fad," says Weiss. "People are concerned about pursuing their private interests and avoiding burnout. So giving them some control over their time schedule is a tremendous benefit."
Encourage feedback
Are you in the habit of changing policies and implementing plans without input from your staff. Those days are over. "Years ago when the boss said 'jump,' everyone asked how high," says Schackne. "It's just the opposite today. People are saying, 'If you don't include me in your decision-making process, I may be out of here.'
Today's employees believe they have something to contribute, and when they are not asked for input, they feel disregarded and ignored. "Give employees an opportunity to let their stories be heard about what they feel should be done," says Weiss. "Sometimes you will hear some good ideas. And the employees get the clear message that you care about their ideas."
Recognize achievement
People develop loyalty to the employe rwho acknowledges their work. At one level, letters of appreciation — copies that go into the staff member's personnel file — can work wonders. So can public announcements of praise for those staff members who have reached landmarks in sales or other areas.
"I think you need to praise them and let them know they're doing a good job. I think that's the biggest thing," Kaser says. "You need to help them take pride in their work. Even when they have doubts that they can't do something, you need to reassure them that, yes, they can indeed do it."
Avoid recognizing achievement in a random manner. Your staff may perceive favoritism and unfairness if one person is singled out for praise while another person with equal performance is passed over. "Set up a program in such a way that everyone understands the rules of the game and has a chance of winning,"says Jacobsen.
Train supervisors
Much turnover is due to personality problems with supervisors and managers. "People join companies but they leave supervisors," says Mel Kleiman, president of Humetrics, a Houston-based consultancy. Problems arise when individuals who excel at one type of work are promoted into management positions without adequate preparation. "We go from worker to supervisor without training,"says Kleiman. "So we lose our best production person, or our best salesperson,and now we have gained a not-okay supervisor."
Whether by a formal training programor by mentoring with another successful supervisor, individuals new to the management position must learn the skills involved with giving feedback, helping people grow, coaching, counseling, delegating and assigning work, interviewing for performance appraisals, and managing priorities. "Everything is team oriented today," says Kleiman. "But who has taught new supervisors to organize teams and play on them."
Plan for success
Use these insights to keep your best staff members from leaving for supposedly greener pastures. Take action now — identify your best people, determine what will make them satisfied, and then provide it.
"Your competition wants your best employees more than they want your best customers," warns Kleiman. "If they get the former, they get the latter."
Beers's formula for keeping good employees is simple. "Number one, pay your people well, and if you feel that that's a struggle, ask for more money for what you do. Number two, treat them professionally and create an environment they enjoy working in."
What Do Employees Want?
How do you keep your best people? “It’s not rocket science,” says consultant Ian Jacobsen, president of Jacobsen Consulting Group, Sunnyvale, Calif. “It’s a matter of doing the right things right.” To find out what the right things are, Jacobsen’s staff interviewed 5,000 people attending job fairs, asking each why they were leaving their current positions. He came up with a list of eight commonlyencountered items on employee wish lists:
- Treat them as partners. Respect them and involve them.
- Share information.
- Provide them with important challenges in their career.
- Value their contributions.
- Let them know you appreciate what they do.
- Use their suggestions and ideas.
- Demonstrate that you care and are fair. Stand by your employees when something happens such as a personal crisis.
- Hold people accountable for what they commit to. Let them know they are a necessary part of your team.
- Pay them fairly and appropriately.
Source: Jacobsen Survey of Employer Attractiveness. Jacobsen Consulting Group, Sunnyvale, Calif.