Times are changing – again. The good news? The economy is improving. The bad news? It is creating new challenges for employers. Unemployment is down. The competition for good employees is increasing and proving harder to find quality candidates.
While there are plenty of articles about hiring employees, where are the articles about retaining good employees? Turnover can be a real problem and not a cheap one either. We’ve written about the cost of turnover before, so it shouldn’t be a surprise. As a reminder: the real cost of turnover, including lost productivity and training, is that position’s annual salary at a minimum. Thus, if someone makes $48,000/year and they quit, your business will suffer at least a $48,000 loss.
The assumption, wrongly, that many employers make is that turnover is a result of money. Statistics show that the overwhelming factors contributing to turnover are personality conflicts, misunderstandings, and a lack of recognition/appreciation—all of which you, as the employer, have control over.
The question to ask is: How do you ensure retention of good employees?
You might be surprised by what you find (and what you don’t find) from interviews with employers who have low turnover. You won’t necessarily find lavish benefits, huge salaries, and expensive CE/teambuilding vacations. Instead, you’ll find an environment where the wages are good, the benefits are fair, and expensive trips are rare or non-existent.
What’s the secret? The organizational culture. A culture that supports employee engagement. In other words, a working environment that is fun and engaging—a working environment that employees want to be part of.
This means a working environment where employees:
- Enjoy and believe in what they do and believe that they make a difference
- Feel valued, recognized and appreciated for their work and contributions
- Are committed to something or someone in the practice
- Will stay in or with the practice based on that commitment.
Here are four keys that can help create an improved working environment and support retention of employees.
Key #1: Workplace Appreciation & Communication
Successful offices with low turnover have, knowingly or unknowingly, incorporated the 5 Languages of Appreciation in the Workplace. This groundbreaking work is the result of Gary Chapman and Paul White; it is outlined clearly in their quick-read book. We recommend this to all employers and managers. Unlike raises and paid time off, workplace appreciation costs little money and little time. The impacts are profound: higher productivity, low turnover, minimal employee-related stress, and a workplace where everyone genuinely enjoys coming to work.
Every year, workers are surveyed across industries and across the country. They are asked why they stay in a job, why they leave, and what they want. While salary and benefits are always on the list, they are never at the top. Consistently, workers want to feel valued and appreciated, make a meaningful contribution to the business, and be treated fairly.
Appreciation cuts both ways. There are actions you can (and should) be doing to proactively show appreciation. There are also actions that can hurt your success. These often come from good intentions, but they have negative consequences. When you have a “bad apple” employee, the tendency is to hold onto that negative experience, and now everyone else is “guilty by association.”
Key #2: Quality, Thoughtful Policies
Often these tendencies manifest into policies that can be a disservice to your culture and morale with employees. Dust off your policy manual or employee handbook, and see if you have the types of policies listed below. Re-read them from the perspective of a brand-new employee; how will someone view these policies who doesn’t know you or your business? What first impressions are you giving?
- “Pay for Mistakes”—these policies effectively charge employees for every little mistake. Lost your key? Pay for the replacement. Lost your paycheck? Pay for it to be re-issued. Accidentally break something? The cost is on you.
- “Deduction from Wages”—this often follows from the policies above: everything comes out of the paycheck: cost of uniforms, cost of tools and equipment, loss, breakage, missing money, loans for dental work, “paying back” the cost of CE if the employee quits.
- “Show me Proof”—you’re calling in sick today? I want proof from a doctor, even if you’re only out 1 day. Your grandmother passed away? I want to know the date of the funeral.
Setting aside possibilities of compliance issues (which are very real), are these policies logical? Take the example of a lost paycheck: first, remember that no one intentionally loses a paycheck, that makes no sense. Second, what is the real cost of stopping payment and re-issuing a new check? $25, maybe $40? Can that simply be a cost of doing business? Or compassion that says, “we’re all human, we all make mistakes”?
To be clear: there’s a big difference between one-and-done mistakes and a pattern of repeat offenses. We are not saying you need to look the other way when an employee loses her key for the 8th time. We recommend treating repeated mistakes as a case-by-case performance issue, not a systemic problem that requires a potentially harmful policy affecting all employees.
It also needs to be said that some employees are simply not a fit, are truly manipulative, greedy, or just plain crazy. These employees are not in the majority. Most employees are well-intentioned human beings who have faults, worries, spouses, children, good days, and bad days (just like you) and who are trying to do a good job.
Successful offices know the value of clearly communicating their expectations. After all, if employees don’t know what it takes to succeed, how can they be successful? This means investing in basic HR foundational elements like policy manuals/employee handbooks, job descriptions, and documentation. These not only hold employees accountable, they also ensure fairness and consistency. Indeed, many workers cite a lack of clear, straightforward policies (misunderstandings) as a principal reason they left a job.
Key #3: Coaching and Training
You’ve hired a good person, you’ve provided a fair compensation package, you’ve outlined your policies clearly, and you’re incorporating some Appreciation in the Workplace elements. What else? Coaching and training.
The economics of staffing are a bit like cars: it’s often cheaper to maintain a car you already own than buy a new one. Likewise, it is more cost effective to coach and train an employee with the right attitude, than to fire-and-hire a new employee.
Coaching and training follow a predictable curve: in the beginning, employees need a significant amount of both. They need to learn about you, and you need to learn about them. Thankfully, this changes within a relatively short amount of time, and the employee is working hard on their own.
On the flipside, if done sparingly or not at all, your employee’s lack of training and coaching will quickly prove to be a significant thorn in your side. Many employers call us when they’ve “finally had enough” of an employee who has been bugging them for years. The first question we ask is “have you talked to the employee about these issues?” Sadly, the answer is usually “No.”
The secret to coaching and getting over the fear of confrontation is to do it early, during the “honeymoon” phase. The very first time you see something that doesn’t meet your expectations, say something. Keep it light at first: “I noticed you did that task that way. I’m not sure how you’ve done that at previous jobs, but at our office we do that this way.” In the honeymoon phase, the feedback comes across as constructive, not critical.
Having said something, you will feel better. Your employees will feel better too. They will feel like you are invested in them and want to see them succeed. Be sure you include praise in those early months as well. Praise can reinforce good behavior and lead to more successful outcomes in the future.
Key #4: Be authentic; strive for a better you
Many employers and managers think they are Oscar-worthy actors. They think their employees don’t know how they really feel about them. The reality is we are terrible actors and terrible liars. Employees can sense and see much more than you realize. They see your displeasure, sometimes even without you being aware of it yourself.
Sometimes it’s difficult to look in the mirror and realize that you are contributing to the problem. Nonetheless, cheer up! Great leaders are made, not born. These are skills you can learn. If you’re not there yet, don’t beat yourself up and don’t resign yourself to “the way it is.” It’s important to maintain a growth mindset, especially with team management. Commit yourself to growth, education, and learning. It will pay off.
Look over these questions, be honest, and keep in mind that you also have permission to make a mistake now and then. Your growth mindset will see you through. Ask yourself:
- Am I punishing my current employees for something a past employee did?
- Am I resentful of any or all of my employees?
- Do I feel like my employees are always looking for ways to get more out of me?
- An employee says a relative has passed away, do you think “it’s probably a trick to take time off”?
- Do I trust my employees? Can employees regain my trust? Are they given second chances?
- Am I practicing the Golden Rule and treating them the way I want to be treated?
I can hear the Devil’s Advocates saying, “What if I spend all this time and it doesn’t work out?” Well, if you don’t spend the time, it’s guaranteed that it won’t get any better.
We speak with thousands of employers each year. Some of them struggle with turnover and some do not. This is not due to luck. Successful owners have created a culture of trust, appreciation, care, mutual respect, and understanding that supports employee engagement. They see themselves as serving their employees while their employees serve them. They are financially fit. The employees want to work there. This can be you, too.
Employees work to provide for their families and further their careers. They want to see your business succeed because that means job security for them and their families. Perfect employees with both the experience and the right attitude can be rare. Investing time and energy in your employees (your Human Resource) can make a huge difference. Commit to a growth mindset. Positivity begets positivity. It has to start somewhere, so why not here, now, with you?