If you believe that your employees are your biggest resource, then you know the damage high employee turnover does to your business.
The time and money you’ve invested in finding, hiring, and training employees walks right out your door when an employee quits.
How to battle employee turnover?
It starts with an understanding of why employees leave. Until you know their reasons, there is little you can do to stop the leak.
Why Do Employees Leave?
Employees leave a business for a lot of different reasons. Most of these reasons are under your control, even in a roundabout way.
1. Better wages and benefits found elsewhere.
Both hourly and salaried employees are tempted to leave if a better wage or benefit package is found elsewhere. In fact, dissatisfaction with wages is the top reason salaried employees leave (www.shrm.org/hrdisciplines/compensation/articles/pages/salary-employees-quit.aspx).
Hourly employees, especially, may be tempted by even a slightly higher wage elsewhere. This is particularly true if they have no benefits. It’s easy to walk away and get a better wage when there’s so little to lose.
Additionally, if employees think that the business is not financially secure or that there is an impending problem in the leadership, they may bail ship before anything happens.
2. Bored with the work.
Not enough work to do. Assignments that are no longer a challenge but are merely rote habit. No chance to use skills and abilities that might fall outside of a strict job description. No sense that they can self-assess and decide what to do because of rigid management that doesn’t allow for it.
These are all reasons employees get bored.
3. Trouble in the team.
Not everyone is easy to get along with, and even the best matched team will have personality clashes on off days. But serious and ongoing conflict in the workplace costs you a great deal of money.
A recent study found that American employees spend 2.8 hours each week dealing with conflict. That’s time you’re paying them that they aren’t working for you. 25% of employees say that conflict causes them to be sick or absent from work. Anger and discord spill across the whole team and will eventually make its way to the customer, affecting sales. And, employees will quit to be free from all of the negativity.
4. They are disengaged.
Employee disengagement is extremely common. As in, 70% of American workers are all but elsewhere when they should be working, according to a recent Gallup poll. Once employees disengage and turn work into merely a time clock and a paycheck, businesses will see 30% to 50% higher turnover (www.environmentalleader.com/2011/08/04/aligned-incentives-and-engaged-employees-improve-triple-bottom-line-performance/).
Engaged employees are productive, innovative, creative…”sick” less often. Disengaged employees have little incentive to be any of those things, and quick to find the door.
When your employees feel like they’re just the tool to be used so someone else can achieve their dream or financial success, they disengage.
5. Poor relationship with the boss.
Are you the problem?
A recent study suggests that half of employees quit because of different type of culture inherent to its industry.
A bad boss is one that:
– Overloads and makes excessive demands on employees, burning them out.
– Micro-manages everything they do.
– Is hard to reach, is rarely around and not working their own business, or otherwise difficult to talk to.
– Has no idea how bad hiring, promotions, and other employee-related decisions are upsetting those already on staff.
– Cares more about him or herself than the staff, making all decisions based on what he or she wants.
– Holds terrible meetings, and wastes employee time.
– Is unable to communicate where the company is going, or where the employee’s job and career might be going.
– Unable to perform successful conflict resolution within the team.
A bad boss ruins the work situation all across the board. Employees can put up with a lot, but a bad boss is the limit.
How To Keep Your Employees From Leaving
How do you think you stand up next to your competitors, in the eyes of your employee? Your competitors aren’t just the others in your industry, but any job that the employee could leave you to take.
One of the best things you can do is get an exit interview with an employee, if the situation allows. This isn’t the time to be defensive or combative, but genuinely ask why they are leaving. You may need to revamp your business in several key areas.
1. Offer great benefits.
Making a great wage and salary available is only part of it. Your benefits package is, at this point, almost considered part of the wage. Even for hourly employees, you can offer benefits. Benefits, after all, aren’t only relegated to medical and retirement. They might include:
– Flexible hours and vacation time.
– Gift cards when team or individual milestones are met.
– Free food or beverages in the break room.
– Pay for employee training such as conferences, books, online classes, or part of an employee’s college fees.
Benefits can be the hook that keeps an employee, particularly if they are benefits not easily or comparatively found elsewhere.
2. Have great culture.
There are two kinds of culture at play in your business: internal and external. The first is what your employees experience, and the latter is what your customers see your business as.
Great internal culture is more than just a ping pong table and casual clothes. Not every workplace is well-situated for that modern version on work culture (e.g. your employees may be required to wear uniforms), and not all employees even want that. In fact, many employees actually prefer a more structured and traditional hierarchic order (www.inc.com/christina-desmarais/your-employees-like-hierarchy-no-really.html) where there are levels of management. Each type of business has a different type of culture inherent to its industry.
Whatever culture you have in your place of business, and whatever management structures you have, your internal culture is less about the games and free beer and most importantly about safety, trust, and reliability. Any workplace that makes an employee feel fearful, defensive, or always on edge is one they’ll leave.
External culture matters, to, particularly to millennials who want to work for a company that is doing good things in the world. Employees like to know that they work for a company that stands for something bigger than the job itself.
To make your culture work, you have to communicate to your employees what it is. That will include both practical and abstract concepts such as:
– Benefits: The wage and other benefits that will be given to all employees.
– Expectations: What you expect of everyone on the team, including management.
– Rules: The behavior limitations that make the work environment safe for all. This includes conflict resolution policies.
– Rewards: The possibility of promotion, bonuses, wage increase, and anything that gives a sense that there is a tangible reason to work hard.
– Core Values: The freedoms, value of input, the value of the team, and the reason an employee should stay engaged.
Much of this will be reflected in your employee handbook and, of course, how well you follow-up and actually run your business according to it.
3. Acknowledge great work.
Letting your employees know they’ve done a great job is paramount. They want and need feedback on how they are doing, especially millennials. A generic approach to recognizing a valuable employee, though, isn’t really the greatest approach. Consider customizing that recognition depending upon the situation. The Robert Half blog suggests a few ideas:
– Email the employee, and CC his or her manager.
– Send a written card or note.
– Tell them in person.
– Give a gift, such as a gift card to a local restaurant.
– Throw a small party, even if it’s just in the break room or a get-together after work.
– Return the favor and help them back.
Exceptional work and behavior that goes above and beyond what you expect should see the larger reward, but don’t forget to commend, in some small way, employees who are chugging along and meeting your expectations. Knowing that their work is appreciate is what helps them keep going.
If your employee does well, let her know. If she keeps doing well, provide a tangible reward.
4. Be upfront about the job.
35% of American workers quit in the first six months. When the post-hire reality sets in, it might not be what employees expected. No one advertises a job, it seems, without a little sugar-coating.
When new employees are told to expect a certain culture, a particular manager, specific benefits or set of perks, and then realizes that won’t happen, they are quick to turn to the idea of quitting and cutting their losses before getting in too deep.
Even if you are desperate to hire someone for a position, you must not oversell the position or the culture of the workplace. Ask the potential employee questions that get to the bottom of what they are hoping for from the job. UPS asks potential hires if they are looking for full-time work (they’ll probably be disappointed if they are). Wells Fargo has employees watch real videos of difficult and angry customer transactions so the potential hire can see if they really want the job.
5. Deal with conflicts immediately.
Conflict in your team will decimate your culture and the entire work environment. As mentioned previously, your customers will even get a taste of it and will think of your business as one to avoid because the employees are unpleasant. The truth is simple: a conflict-free business is one both employees and customers want to be at.
Dealing with conflict isn’t easy, but there are a few approaches:
– Learn to identify conflict. Most conflicts start small, with actions that managers might not even notice. Subtle bullying and harassment, such as purposefully ignoring someone or giving them a look, can be the small start of something huge.
– Meet in private. Bring the conflicted employees together in private. Talk in private and slow, deliberate tones. Everything about this meeting is to listen and ascertain what is happening, and to keep things from escalating.
– Help them understand. In the meeting, let each take a turn explaining their point of view. Before the other can speak, they must restate what the other point of view is to the coworker’s satisfaction. This is to help all parties understand what the other is feeling and get past their own complaints.
– Stick with it. No one leaves until their is a resolution. The resolution must be genuine, even if it involves the exit of an employee for good.
– Don’t be afraid of throwing the bad apple. For the sake of the rest of your employees, it is better to get rid of one (or two) who is causing problems than let the rest be spoiled.
There are some leadership personalities that thrive on conflict, but most people don’t. Definitely don’t get the mistaken idea that constant conflict is “good” for the team and encourages creative competitiveness. You’re working a business, not a fight arena.
6. Hire the right people for the right job.
Above all, hire the right people.
Great workers are not the right worker for every job. The best employee will be miserable in a job poorly matched to skills, abilities, and personality.
They mistake skills for talent and interest. They ignore the importance of a person’s attitude and focus on the work they can do. They think lower level jobs are easy and insignificant, sorely missing the point about how important the person working the sales floor directly with customers truly is. Or, that proper training will fix any poor employee-job match. Even worse, they first look to family and friends.
Perhaps the best thing you can do to stave off employees turnover is to make sure you hire the right employee in the first place. While you cannot completely control what happens in an employee’s life and the decisions they’ll make, you can at least make every attempt to make their work situation positive.
Chad Halvorson is the CEO/Founder of When I Work. This article appeared on wheniwork.com.