It’s well known that the growth and success of any business is largely dependent on its employees. The first port of call is to do everything you can to secure the best you can afford – after all, what are you saving by putting together a second rate team?
But hiring the right person for the job is not the only factor in creating a strong work force. It’s keeping them, and keeping them for a while.
A costly exercise
It’s estimated that replacing an employee earning R300 000 cost to company per annum can set you back as much as R750 000 in direct and indirect costs. According to Samantha Crous, country manager of the CRF Institute, these direct costs include:
- Advertising and interviewing expenses
- Pre-employment testing fees
- External recruitment agency costs
- Salary increases
- Relocation and training.
As for the indirect costs, they can end up being even more when factoring in:
- Loss of invested training
- Loss of manpower
- Time and productivity in developing a new employee’s necessary skills
- Loss of morale when a team member leaves
- Consulting fees and overtime
- Loss of reputation for the business
- The ripple effect of instability unsettling shareholders.
With the average employee retention rate sitting at approximately four years, hanging on to your top players as long as possible is essential. Making your business a desirable place to work is therefore key.
What follows are some strategies for improving employee retention that don’t necessarily involve a day out for team-building.
1. Plug in
There is overwhelming scientific evidence to show that money is not the only factor in retaining employees. In fact, throwing money at the problem can add exponentially to your financial challenges as your company expands.
Instead, by communicating your business’s vision, employees feel connected and emotionally tied to the business’s goals. The business’s achievements become their achievements. As such, creating meaning and purpose for your employees is critical.
Marcus Buckingham, international author, CEO and keynote speaker says that when people are asked what their ideal job is, they most commonly reply, “What I’m doing now, but with more responsibility.”
By recognising and understanding your staff’s various needs, motivators, drivers and desires, it’s possible to integrate them into job descriptions that profoundly shape their lives, increase their performance and make them want to stay.
2. Develop a future
International talent management firm, SHL’s 2011 global assessment trends survey showed that 55% of HR professionals consider leadership development their top priority, while ‘development’ was the most wanted job attribute of employees.
To make the most of these desires, get your management teams involved with coaching and mentoring employees and assisting top performers move to new positions. In conjunction with mentoring, promote from within as much as possible.
If there is no clear future of advancement for your star workers, they will look to greener pastures.
A word of warning: whether promoting staff or expanding their responsibilities, always ensure they know what is expected of them and what their job entails. In smaller companies where employees can have a wide range of responsibilities, lack of clarity of what a job entails can result in an inability to perform to standard and a consequent dip in morale.
3. Perks of the job
These don’t always have to cost loads of money. Developing a culture that makes the workplace an inviting space goes a long way to retaining employees. For example, bringing in cake on Fridays or letting employees step out of the office to go to the bank may seem insignificant, but providing leeway for better managing their lives will foster appreciation and the likelihood of sticking around.
To keep motivation and performance high, offer incentives. When done right, rewards can keep employees excited and focused on their jobs and meeting goals on time. For larger companies, consider offering stock options, and for smaller companies extra leave or a paid trip away.
If you can’t afford meaningful annual raises, create a bonus structure where employees can earn an annual bonus if they meet pre-specified and achievable performance goals.
4. Offer competitive benefits
Importantly, these must fit your employees’ needs and require careful financial planning. If they have a family, providing medical aid for dependents, life insurance and a retirement savings plan is compelling, but other perks such as flexi-time or working from home once a week show you’re willing to accommodate their lives outside of work.
Other perks can include increasing leave as an employee gains seniority, offering paternity leave as well as maternity leave and family medical leave.
For those employees who have really proven their mettle, consider a sabbatical programme for those who have worked for at least five years. This can be based on a set period of time – typically 12 weeks – that an employee can take to travel or pursue a passion, or adding a one-time offer of an additional three weeks paid leave to their leave quota.
Besides the boost in creative energy and sense of rejuvenation felt by employees once they return, it can also increase retention.
For companies that can’t afford this kind of perk, consider implementing a 4-day work week, a Friday early-closing policy, or even a once a month day off. By extending work hours on other days accordingly – and within reason – this can boost employee motivation and sense of having their personal lives accommodated.
But be sure to consult your employees to get their feedback. When the work/life scale is balanced correctly, both employee and employer benefit.
5. Clown around (occasionally)
When business is not doing well or experiencing a reengineer, merge, restructure or downsize, employees can feel overwhelmed, stressed, burned out and powerless. To prevent the office moving into cut-throat survivor mode, bringing in laughter can help staff keep their sanity, ride out the wave of change and stay with the company.
When employees clown around or blare music they’re not (always) wasting valuable time, they’re using an available tool to increase and maintain team spirit, blow off steam or be creatively inspired. Stifling your team during tough times is a sure-fire way to lose players. For Nandos co-founder Rob Brozin, this rings especially true.
“We didn’t realise how hard this business was going to be, coupled with the fact that we didn’t want to ‘work’.
So we created a business where the basic philosophy is to have fun and make money,” he explains. This work philosophy has also been incorporated into their marketing, developing a reputation for highly-anticipated, fun and light-hearted advertising, fuelling an internationally successful business.
6. From the horse’s mouth
When losing employees, it’s important to conduct exit interviews to determine what factors were involved in making them leave. Without this information you cannot address systemic problems or meet your staff’s needs. In addition to conducting exit interviews though, is conducting annual stay interviews to learn why your employees are sticking around.
By asking questions related to why they came to work for your business, why they have stayed, what are non-negotiable expectations, what would make them leave, as well as what they would improve or change, you can gather the necessary information you need to strengthen your employee-retention strategies.