It’s all well and good having the slickest recruitment process in the business, but one of the best ways to have a workforce that is the envy of the business world is to hold onto the ones you already have.
Staff retention is critical to any company’s success. Oxford Economics recently revealed it costs a hair-raising £30,614 to replace an employee in lost output while a replacement gets up to speed, as well as the straightforward logistical costs, while other reports have quoted 200% of the employee’s annual salary as a reasonable loss.
So a substantial element of the best recruitment policies will often mean keeping the best employees happy.
That’s easier said than done, however. People leave their jobs for all kinds of reasons and you can’t make everybody happy, all of the time.
More workers would have moved in the last year if the economy was stronger and of the 24% of employees who were determined to move, almost half cited bad management as the main reason.
Here are six tips to make sure you keep you keep staff turnover to a minimum and save yourself in the long run.
1. Promote from within
There is nothing more soul destroying than going over and above every single day only to see the desk you covet occupied by a total stranger. Similarly, there is no greater internal branding story than the executive who worked their way up from the bottom.
Never underestimate the importance of a clear path of progression. Even if it’s a long haul, employees need to know they can fulfil their dreams and ambition within your company, or they’ll look elsewhere.
It’s not all altruistic either. The Wall St Journal recently published a study by Matthew Bidwell, an assistant professor at Wharton Business School in America, which showed that external hires cost 18% more in terms of salary and don’t match the performance of an internal promotion for at least two years. They were also 61% more likely to get fired.
2. Pay Well
It sounds obvious doesn’t it? But plenty of companies still don’t truly see the correlation between better pay, improved staff retention and, in the end, a healthier bottom line.
The recession has led many companies to cut costs to the bone. That’s understandable, but if the staff feel they are being forced to bear the brunt alone while profits increase and executives pocket huge salaries, the winds of discontent can blow swiftly through the company.
With the cost of losing staff so clear, a small concession at review time can actually save your company money.
So pay your staff what they’re worth, or even a little more, if retention is your greatest priority. Also think about regular reviews and a clear path of progression with money too.
Pay your superstar not only what they’re worth right now, but a reflection of their future value as well.
If employees know that long service is rewarded with a bigger pay packet, they’ll likely stick it out for the long-haul. If, however, they know that their wages have nothing to do with how long they’ve been at the company, there is no incentive to stay the course.
At the end of the day, you don’t want your best employees going to your competitors simply because they paid more.
There was a time when every big company seemed to have a subsidised canteen, final salary pension scheme and even an in-house masseuse. While the perks are still raining down in the US, in austerity hit Britain those days are largely gone.
Benefits, though, make a difference and can be as small as ensuring all holiday left at the end of the year is paid for, or as dramatic as private healthcare or a solid workplace pension scheme.
You could always adopt the Richard Branson model and allow your staff to take as much holiday as they like (!) but we’re pretty certain that in the wrong corporate cultures this could cause anarchy.
Such schemes can truly incentivise your employees to stick with you for the long-term, help to show them their worth to you as an organisation and can often be the difference when it comes to accepting the job in the first place.
4. Outstanding Training
Life isn’t just about money and most of your staff will be looking for personal development and growth. A proper in-house training scheme will give them long-term goals, as well as the instant gratification of learning new skills.
Training can take many forms, from formal days with outside organisations through to in-house mentoring programmes with the most experienced and specialist hands on deck.
Anthony Hughes, Training Director of Coburg Banks:
“We had the same issues here for several years. We used to recruit people to work for us but didn’t have a structured training plan that was tailored to the individuals’ differing levels of abilities. Since we’ve implemented our Training Academy, which incorporates classroom and video based training, we’ve seen staff retention levels go through the roof.”
Developing a training plan can take time but the rewards are worth it. Your aim is to train people so well that they do the job to the same level you would. Simply leaving them to their own devices often means that they won’t succeed to the level you expect, and could result in them leaving your business.
You’ll retain your excellent staff this way, which is the primary objective here. They’ll feel genuine progression and will learn without the need to work elsewhere.
Management training can also help your generals on the ground deal with their own troops more effectively, too, lifting morale throughout the firm and helping to reduce casualties along the way.
5. Proper Complaints Procedure
A sure-fire way to lose staff is to give them no other option but leave! Let me explain.
If there is simply no way for an employee to vent their frustration, or address a real problem, they will leave more often than not.
So there has to be a proper complaints procedure, not a token effort, and the employees have to know that every issue raised is dealt with and doesn’t simply go to the shredder.
One of the greatest causes of discontent, and inevitably staff turnover, is a workforce that is divorced from upper management. Make sure you know that you’re listening to their concerns and acting upon them if you want to increase staff retention.
6. Exit Interviews
It is a Utopian dream that nobody will leave your company. It happens, indeed it has to happen, so use these occasions to up your game.
When an employee leaves, it might be the best chance you’ll get for an honest set of answers about your company and how it is run. So take the chance, complete a full and proper exit interview and find out everything you can.
Then learn, adapt and implement your findings so that you don’t make the same mistakes again.
Of course a disgruntled post room worker might use the opportunity to abuse their co-workers, but the majority of exit interviews will contain candid nuggets of gold that you simply won’t get from someone that intends to turn up for work tomorrow.
It sounds obvious that you need your workforce to be as happy as possible to keep them as productive as possible. More often than not, how you treat your staff will end up being a reflection on how they in turn treat your customers.
Treat them well (in a fair, structured way) and success will follow. Train your staff so that they have all the tools to succeed in their career and pay them well enough so that they don’t want to join your competition.
Easy, isn’t it?