By Ty Bello
Ever been “blindsided” by an employee leaving your company? Ever felt betrayed when they leave to work for a competitor?
They may tell you they are leaving for “more money” – ever wonder what the real reason was for their departure? An average company suffers a 12- to 15-percent turnover rate annually. Seventy-five percent of the demand for new employees is simply to replace workers who have left the company.* Not to mention that replacing an employee may cost up to three times the employee’s current salary.**
Can you afford to lose that kind of money each and every time an employee walks out your door? No business can.
This is further exacerbated by the recent low unemployment and opportunities for higher wages it seems in every industry. Last month’s article in Outdoor Power Equipment – How to Become the Employer of Choice – addresses how you can move your business forward in this new environment. This is a must read.
Understanding why these employees leave, coupled with becoming an employer of choice, will assist and limit the amount of turnover in your team.
Some of the low-retention areas include: unclear and changing expectations, weak supervision, limited to no voice in the business, and skillset alignment.
Let’s address each of these and make some suggestions on how to change the existing environment that produces these turbulent situations.
Unclear and changing expectations
Why are there unclear expectations? In previous articles it has been emphasized the need for clear and concise job descriptions. This is the template by which team members can understand expectations and will provide clarity throughout the year. Now, as jobs change, this must be updated and also presented to the team member so they are aware of the changes and thus new expectations.
Why are we constantly changing expectations? We change expectations for a few reasons. First, personnel turnover is the top culprit of this situation. When someone leaves and we do not have an immediate replacement, we add responsibility to the team, and never update or change this job description. Well, the intention is to replace the team member, so no need to update the job description is always the excuse. But the problem is that we don’t replace the exiting employee for six months. So, if this happens, don’t change the job description, but produce an addendum to their employee file, sharing the new temporary responsibilities. Also, consider some sort of recognition for the team member who stepped up and took on more responsibility. This does not have to be much, just recognition and maybe a gift card.
Changing these common behaviors will make a difference in how team members view and talk about the business.
Supervision is weak because of a lack of training, education and coaching. It is a high probability that someone reading this article has a supervisor that they know is under performing and nothing has been done to improve their performance.
How do you incorporate ongoing leadership and supervisor training? There are a host of ways to conduct ongoing supervisory training and education. You must take the initiative and incorporate a system approach the incorporate webinars, books and articles. You need to search for topics that will help your supervisors be better leaders and managers.
It’s clear that not every business has the added resource of a human resources staff member or even an education department. But as you look at ways to prevent turnover and increase retention, you must adjust your existing personnel resources so that education and training become a priority.
This is an investment of time in the team. Very few people will take the initiative to self-educate or train, and you have an obligation to provide this for your team, especially if you want to engage and retain them.
You also must incorporate coaching for each team member. Coaching is two dimensional. You must coach each supervisor and manager and then teach them how to coach their team. By coaching each supervisor and manger you essentially “inspect what you expect.” Coaching should be monthly for all team members.
Last, you need to observe your supervisors and managers while they are engaging their team. Of course, there will be those who do one thing when you are around and another when you are not. But, you will “observe” by the body language and expressions of the team if this is reality or fiction. Also, some team members will verbalize their feelings about their supervisor. This can be a slippery slope. Best practice when this happens is to ask the team member if they have discussed their feelings with the supervisor. More than likely they have not. You should encourage them, and even coach them on how, to do this; and ultimately the supervisor needs to understand how the team is viewing his or her leadership or lack thereof.
Taking these steps to train, educate and coach your supervisors and mangers will enrich and strengthen them as individuals, and also better engage the entire team.
Limited to no voice in the business
Not everyone on the team needs a voice in the business, right? That statement is correct; however, many people on the team want to at least know someone is listening.
The immediate reaction to hearing the statement, “the team needs a voice in the business” is typically negative. After all, this business was built on the sweat on your brow, not theirs. That may be the reaction, but you must consider that these team members who provide a service to the business and customer do actually have a voice, and maybe even an opinion.
How do you balance listening so the team will have a voice while still maintaining control? Oops, there it is, the real reason the majority of leaders and owners don’t give credence to the team having a voice – it’s about losing control. More than likely, you have already done a good job listening to others, and to some degree this has contributed to your overall success. So, what is being suggested here really is no different than what you have done throughout the years with your business. You just need to make it more of a routine rather than rarity.
You do this by sharing with your team that their input and feedback are critical to the mission of the business. You provide them with various platforms to provide such input and feedback, so that everyone has a level of comfort to share. The “where” and “how” they share is critical. Some will be bold and let you know their thoughts right in the middle of a meeting. Others will pull you aside and share. These are the team members you really don’t need to worry about. It is the silent ones that you know have input and feedback but do not share. They are bashful, shy, fearful, or simply just don’t know how to share. Providing different platforms to share will open these team members up, and provide you and your team with some items to consider.
The platform(s) can be any of the following:
- Input and feedback DropBox (provide the form for them to complete, and make it simple)
- E-mail address for input (such as Input@your_company_URL
- A monthly input and feedback meeting
The success of this is not when they provide input and feedback, but when you respond to every one of their ideas. That’s when everyone wins. You will shift the momentum of your business when you recognize the input and feedback of every person who is willing to take the time to share what is on their head. Remember, a voice just means listening.
So, you hire the right people for the job, put them in the right seat on the bus, and expect them to be employees for life. NOT ANYMORE!
According to the Economic News Release from the Bureau of Labor Statistics, the median number of years that wage and salary workers have worked for their current employer is currently 4.6 years. However, the longevity does vary by age and occupation. For example, the median tenure for a worker age 25 to 34 is 3.2 years. This is the reality we are all facing.
People grow, ambitions change, opportunities should be made available – this is reality. You need to be constantly assessing your team through coaching and quarterly alignment sessions. An alignment session is where you meet with your team member and talk about their current position, ambitions and goals. This should be incorporated on a quarterly basis in one of your monthly coaching times with your team.
But what if you don’t have place for them to advance? Are you opening a “can of worms” with this alignment session? Yes, you are opening a “can of worms,” but this is not a bad thing. This meeting and time with this team member is about “them.” Nobody wants to hold someone back. Of course, you don’t want them to leave, but to not discuss their alignment, future, opportunities, growth, and potential is holding them back. Open this can of worms and you will be empowering your team member to either grow within your business, or help them find where they need to be.
If you have the opportunity to assist with further education, please do so. Also consider helping them with training and education for a hobby that they have. If they like micro brewing, sewing, singing, or have always wanted to take a baking class, then created a hobby fund and every team member can receive up to $100 per year toward the further education and training in their hobby. Alignment equals fulfillment. Help your team be more fulfilled.
Will these tips along with those provided in last month’s article prevent turnover and help attract more candidates? Yes, but not completely. People will always seek other opportunities, people will also not always align with your business culture. And, let’s face it, people will be people, and not everyone will get along. However, by implementing these behaviors in your business, your business will be moving in the direction of the new reality of employment. Good luck.
* Source: Center for Community and Economic Development www.uwex.edu/ces/cced/index.cfm
** Source: Greg Weiss www.keep.com.au
Ty Bello, RCC is the president and founder of Team@Work, LLC. He is an author, communicator and registered coach. The team at T@W has more than 50 years of combined experience in assessing, developing, and coaching sole proprietorships, sales teams, C-suite executives, individuals and teams in a variety of industry settings. Contact Ty at firstname.lastname@example.org your sales, customer call center, and management coaching needs. Or visit www.teamatworkcoaching.com for more information.
Cost of termination
Cost of termination / processing out an employee takes time (yours or HR), removing the employee from payroll, taking names off security lists, collecting company property, and adjusting benefit program extensions can cost between $1,000-1,500
Cost of replacement = Average cost of hiring and orientation for non-exempt employee can top $1,100; for an exempt employee it can top $9,000
Cost of vacancy = You lose revenue each and every day that spot is vacant – either someone else does the job poorly and neglects their normal duties, or the duties simply fall into a black hole.
To calculate this in real dollars:
* Take the total annual company revenue per employee and divide it by the number of workdays in the year (usually about 240 to 250).
* Multiply this number by the number of workdays that the job is vacant.
* Subtract the cost of pay and benefits for those workdays since they were not paid out.