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retain employees

4 Ways to Avoid the Dreaded High-Turnover Rate

The cost of employee turnover is outrageously high. When a company loses a salaried employee, it can cost anywhere from six to nine months’ worth of the departed employee’s salary to hire a replacement. This means that if an employee is being paid $40,000 a year, the cost of everything from recruiting to training expenses will be around $20,000 to $30,000. In addition to costing your company a fortune, it can discourage talented employees from joining your organization. High turnover is one of the major red flags job seekers look for when considering a new employment opportunity.

Here are four ways companies can step up their game and hold on to the talented employees they worked hard to acquire:

  1. Get Rid of Top-Down Management

Everything in the business world is evolving and the concept of management is not immune. Many of the old rules and practices no longer apply, and the lack of a modern workplace philosophy is forcing skilled workers to leave their current company and take their talent elsewhere. The top-down approach to leadership and ruling with an iron fist is no longer a popular way to run a business.

In today’s workplace, the term “collaborative leadership” is commonly cited as a strong approach to employee management. This concept emphasizes leading by example and focusing on both corporate and individual benefit. For instance, Jacob Morgan, author of The Future Of Work, explained in a Forbes article how AMP Bank in Sydney, Australia makes it a point to sit down with each employee to explain how new technologies and strategies can benefit both parties.

It’s important to realize the vital role management plays in the development of a company. Gallup estimates that managers account for 70 percent of the variance in employee engagement scores across business units. Great leadership is a crucial factor in retaining employees; it goes back to the famous saying that “people don’t leave jobs, they leave managers.”

  1. Learn What Millennials Want

By 2020, it’s estimated that nearly half of the workforce in the United States will be comprised of millennials. Therefore, it is crucial to determine what these younger employees want out of a company. Ask yourself the following questions:

Millennials are looking for more than just a job with a steady paycheck, they want careers in which they are engaged with their company’s goals, and can develop their professional skills. A 2014 survey conducted by the Harvard Business Review and The Energy Project found that employees are most engaged when these four core needs are being met:

  • Value – Being cared for by their supervisor
  • Purpose – Finding significance in their work
  • Focus – Prioritizing
  • Renewal – Ability to take needed breaks

Regardless of the age of the employee, there is nothing worse than being stuck at a job that isn’t motivating. Fostering employee engagement can be difficult. However, emphasizing honesty and transparency for both company and employee alike can be integral in obtaining uninhibited employee feedback to gauge the direction of your workforce and what motivates them.

  1. Promote a Culture of Innovation

Everyone wants to be involved in a cutting-edge organization. Companies that want to remain ahead of their competitors must do their best to promote this mindset both internally and externally. For starters, when you’re advertising a job opening, take a step back and examine what your company is doing differently than similar organizations. Once you have a firm answer, drive this idea home and showcase what your business is collectively bringing to the big picture compared to your competitors.

Based on your business, this can be a daunting task. But, regardless of what product or service you provide, there is always room for innovation. Take Michelin for example. Tires might not seem like an innovative product but the science behind how rubber interacts with the road is complex. To promote a company-wide innovative mindset, Michelin sponsors cross-functional hackathons and internal incubators where employees are free to take risks and come up with new ideas for the good of the company.

Making sure that innovation is a strong aspect of your culture can play an enormous role in keeping employees engaged and motivated.

  1. Recognize and Reward Employees

While this one might seem obvious, it is still accurate: everyone likes to know their hard work is being noticed. Great employees are hard to find, and even harder to keep. So when you notice colleagues going above and beyond the call of duty, it’s important to provide plenty of recognition and rewards to encourage repetition. Recognition is essential to employee engagement and The Corporate Leadership Council shared in a recent report that highly engaged employees are 87 percent less likely to leave the organization.

Events like company-sponsored happy hours or weekend getaways celebrating a strong quarter can go a long way in demonstrating to employees how much their work means to an organization. Going beyond these types of “job well done” gestures, making sure top performing employees are appropriately compensated is the most important factor in employee retention.

To address this, you can try setting up recognition and rewards programs that encourages daily praises and constant appreciation. Or consider implementing programs within the workplace that are transparent when it comes to pay raising goals, such as merit-based pay structures. Just be sure to set goals at a level in which employees will need to put their best foot forward, while remaining reasonably attainable.

Talented workers tend to know their worth. If you are not paying them appropriately, they will have no problem finding an organization that will.

Over to You

Retaining high performing employees in the current business climate is very challenging, and with the many detrimental costs of employee turnover, your company’s bottom line could be adversely affected. If your turnover rate is higher than you would like, it might be time to take a close look at day-to-day operations and find the root cause as to why people are so willing to leave your organization. Sometimes, it is a simple fix. Other times, a complete organizational reinvention is needed to ensure the external perception of your organization matches the internal. At the end of the day, a company that focuses on engaging their employees, whether through strong leadership, culture, recognition, or rewards is on the right track to reducing turnover.

To learn more about employee turnover, check out the blog post How to Spot Who’s Going to Quit Next.

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About the Author
Lori Wagoner is a market research consultant. She advises small businesses on new ways to find local and national business. She’s an avid blogger and writes for sites such as Small Business Can, Tweak Your Biz and Customer Think. You can catch her on Twitter @loridwagoner.

 

unbeatable workshop ideas

5 Fun Employee Workshops to Host in the Office

Office workshops break up the day, boost employee loyalty, and reduce turnover because they communicate the message that each individual contributor is more than a number. The key is in choosing the right workshops; the less they feel like a chore for employees, the more effective they’ll be. According to management training and leadership experts at Mind Tools, ineffective workshops can bring more problems than they actually solve: “Done wrong, they can be a huge waste of time and money. However, if they’re planned well, they can be incredibly valuable for everyone involved. Workshops are great for brainstorming, interactive learning, building relationships, and problem solving,”

Consider the following five workshop ideas and how they might fit with your company culture. Choose a few to sprinkle into the company calendar, adding variety and fun to the usual brainstorming sessions and project-focused meetings.

Lunch and Learn Workshop

Choose a day each month when all the members of your department converge for an hour to “network” internally. Cater lunch from a local restaurant or ask everyone to bring a potluck dish to make it more of a special event. Each month, one team or employee will share an important project they’re working on. The rest of the team can then provide constructive feedback and fresh ideas.

This open dialogue strengthens both the sense of camaraderie and level of collaboration between teams. It’s easy to operate in a siloed organization, but that’s not good for business, or your employees. Use your monthly “Lunch and Learn” to remind employees that their co-workers are valuable resources that they can and should turn to.

Self-Defense Workshop

Not all workshops need to be work related—in fact, to keep employees interested, it’s better if some aren’t. Workshops such as this one for self-defense show employees that you care about their well being, both in and out of the office:

“For companies who care about their employees, especially those whose employees regularly walk to their cars at night or alone, it would behoove employers to offer self-defense training courses for workers,” says Jeremy Pollack, self defense expert for Home Security Super Store.

The most important part of this workshop is choosing the correct instructor. Pollack suggests the following tips for vetting:

  • Does the instructor have videos you can look at?
  • Has an HR rep or a referring party been to an actual class and seen what the instructor has to offer?
  • How realistic is the instructor’s self-defense style, and how much real-world training and application does the instructor have?
  • Does he or she fit with the culture of your workplace?

Vision Board Workshop

Transform a conference room into a creative space for employees to make their own vision boards. Vision boards are a visual representation of how you want to feel or something you want to accomplish – a way to bring things inside you to life. Giving your employees the opportunity to create their own vision boards is an exercise in abstract thinking and serves as a way to help them explore avenues and inspiration for personal growth, both within the organization and as individuals.

A few key materials for this includes:

  • White boards and markers
  • Pens/pencils
  • Sticky notes
  • Magazines
  • Scissors

Host this workshop each month, allowing  a maximum of five participants each time. At the end of the workshop, have the participants share their favorite piece of the completed vision board with fellow employees. This should be inspirational and eye opening for everyone, even employees who didn’t participate that month.

Take it up a notch by inviting a life coach into the office. The five participants can talk with the life coach for 30 minutes as a group to start thinking creatively about their profession and growth. They can use this conversation to spur their ideas.

Mindfulness Workshop

Research conducted at the University of California Berkeley has found that practicing moment-to-moment awareness can reinforce an employees’ confidence, satisfaction, focus and productivity. Help them funnel these positives into their job performance by offering mindfulness workshops.

A few mindfulness workshops you can host include:

  • Meditation, guided with a focus on productivity
  • Yoga for reduced stress
  • Awareness and relaxation training
  • Work-life balance training

If employees love this workshop, you could make meditation and mindfulness a daily part of their routine. For example, schedule one conference room as “open” from 8-10am for quiet meditation every morning. People can choose to use it as they desire, boosting efficiency and well-being at the same time.

Financial Tools Workshop

Facilitating a money management seminar will help your employees understand the nuances of investment, budgeting, diversification and other financial concepts. Equipping people with the knowledge and resources to allocate their income wisely is both a source of empowerment for them and a reflection of your leadership expertise and concern for their overall well-being.

According to experts at Jumpstart Coalition for Personal Financial Literacy, “Companies providing financial education show improvement in the workplace including increased productivity, employee morale, and company loyalty and decreased healthcare costs, absenteeism, turnover, workplace distractions, and operational risk across the company.”

As the Jumpstart experts explain, a workshop like this is also beneficial to your bottom line, “Financial education programs have the effect of contributing to the company’s bottom line between $3 and $4 for every dollar spent.”

Financial workshop ideas include:

  • Financial tracking: Creating and maintaining a budget; setting goals.
  • Smart investing: How and where to invest; how to get the most for your money.
  • Credit cards: Smart use of credit; best ways to maintain good credit; what to look for in credit card rewards.
  • Retirement: How to prepare; what the company does to help; different types of accounts, along with benefits and drawbacks of each.

Regardless of your business’ overall size or scope, company growth is dependent on an engaged, cohesive and dynamic workforce. Therefore, offering workshops that benefit your employees, both professionally and personally, can mean the difference between attracting and maintaining top-tier talent versus mediocre space-fillers. Make your team feel appreciated, and their performance will speak for itself.

Are you looking for more ideas on how to improve your office culture? Check out my blog post 5 Company Initiatives That Improve Office Culture.

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About the Author
Jessica ThiefelsJessica Thiefels has been writing for more than 10 years and is currently a professional blogger and freelance writer. She spent the last two years working tirelessly for a small startup, where she learned a lot about running business and being resourceful. She now owns her own business and has been featured on Forbes. She’s also written for StartupNation, Manta, Glassdoor and more. Follow her on Twitter @Jlsander07 for more small business tips and ideas.

 

 

 

High Employee Turnover

How to Protect Your Company from High Employee Turnover

Every manager and HR professional views employee turnover as a headache, but do you actually know how expensive and damaging it can be to your organization? Here’s a look at the dimensions of this complex problem and some tested managerial practices to alleviate it with long-term solutions.

The dimensions of the problem

Current statistics from Catalyst show that it costs an average of one-fifth of an employee’s salary to replace that person, which means that for a position paying $50,000 a year, your replacement costs will generally run over $10,000. Furthermore, this cost estimate is only an average; replacing more specialized employees can often run into six figures! One Catalyst estimate states that turnover-related costs amount to 12 percent of pre-tax income for a typical company; and these figures don’t begin to describe the internal stress created when someone quits, or the hit your brand can take if a disgruntled departing worker shares their displeasure on social media.

From the employee point of view, it’s important to realize that in 2015, almost 25 percent of American workers left their jobs voluntarily. Moreover, nearly 37 percent stated that they were currently thinking of quitting, even though they hadn’t made the move yet. The root of employee attrition originates in a lack of engagement, so the best approach to protect your company from high employee turnover is to focus on employee engagement. However, despite these alarming figures, nearly 1 in 5 executives still don’t measure their employees’ engagement in any way.

Start at the beginning

Creating a sense of engagement and belonging in your staff begins on the very first day. One-third of all employees know within the first week at a new job whether they will stay with the company for the long term. With this in mind, it is important to focus on the quality and structure of your onboarding process. Your onboarding process should be built with employee retention as one of its primary objectives. The mission and purpose of your organization should be clearly communicated from day one so that your new hires can envision your company as the right fit for their career in the long run.

Build team relationships

Assigning a mentor to new employees helps them integrate into the work culture and feel more welcomed by other team members. The mentor will naturally take an interest in the person to whom they are assigned, and should feel invested in making sure the new employee transitions into their role smoothly. An important thing to remember is that formal mentoring is only a part of the senior employee’s job. They also need to make introductions, share practical knowledge, and help the new employee to feel welcomed as a valued part of the team.

Make room for personal work styles

Providing enough flexibility to allow for various work styles and schedules is also becoming increasingly important to organizations’ employee retention efforts. If you have employees who have expressed an interest in working a slightly adjusted schedule, allowing them to shift their start time a few hours earlier or later builds loyalty and goodwill by letting them know you trust them to enough to be flexible. Harvard Business Review cites an experiment in which half the workers at a travel website were allowed to choose whether they’d like to work from home. After a nine-month trial period, the company found that workers in the at-home group quit at half the rate of those who remained at the office. Furthermore, productivity in the at-home contingent had increased by 13.5 percent. Not every employee prefers to work remotely, but facilitating that opportunity will build your brand’s reputation as being a responsive, caring employer.

Help your employees reach toward the future

Providing your staff with training and development opportunities is also an essential part of any retention strategy. This may seem counter-intuitive if you think that you’re just spending money training your staff for their next career move. But as a matter of fact, training has been statistically linked to retention, and HR consultants point out that their experience bears out these figures. Offering your staff the chance to increase their skills is a form of succession planning: By nurturing your company’s top performers you ensure a home-grown stable of future leaders. It also broadens the extent of your own in-house expertise, potentially saving you money by filling existing gaps in skills. Finally, the challenge of and rewards of learning new skills increase employees satisfaction and actually slows employee turnover.

Engage employees through recognition

Recognizing your employees for the contributions they make is another essential element in any program to increase retention. This basic management truism is all too easy to set aside when the pressure is turned up for higher productivity — but the price of ignoring employee recognition is far too high to pay. In a SHRM survey of workers who had quit in the first six months of a job, 38 percent said that they might have stayed if they were “recognized for my unique contributions,” or if they received more attention from coworkers and managers, or if they had simply been offered a friendly smile.

The solutions to employee turnover are some of the same actions that will strengthen every aspect of your business. When you make internal changes that bring your staff a greater sense of well-being and a feeling of being supported, you’ll not only retain them but also attract top talent and deliver better products and services as a result. To learn more, download our white paper on uniting your workforce with a positive company culture.

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How to Spot Who’s Going to Quit Next

Most of your company’s expenses are unavoidable, but employee attrition is one of the costs that you can have significant control over. Employee attrition can cost six to nine months’ worth of the departing worker’s salary, so it’s in your best interests to find ways to address employee attrition head-on. Of course it’s necessary to create a culture in your organization that makes people want to stay — but it’s equally important to be able to recognize which employee is planning to quit next. Research into employees quitting provides some actionable insights:

Demographics most likely to quit

Over half of employees who leave their jobs do so within the first year, according to a study by Equifax. This statistic indicates that the early phases of your new hires’ careers are the most sensitive and that you should pay extra close attention to new hires who show continuing signs of disengagement at the workplace. To this end, it is important to focus your onboarding program on how to engage employees as quickly as possible to avoid high turnover. It’s also helpful to be aware of which industries have the highest percentage of employee turnover. The average turnover rate in 2015 across all industries was 16.7 percent. However, the banking and finance industry saw an 18.6 percent turnover rate, the healthcare industry was at 19 percent, and the hospitality industry topped the list with a whopping 37.6 percent employee churn rate.

Specific traits that mark a quitter

While knowing that your industry tends to have especially high turnover rates can cause you to be more alert to the risks, it also helps to know what specific traits to look for in your employees. Research conducted at Jon M. Huntsman School of Business at Utah State University yielded an actionable set of behaviors that you should be watching for. If employees display at least six of the behaviors listed in the Utah State University study, the likelihood they are planning to quit in the near future reaches 80 percent. Top behaviors listed in the study include:

  • Less focus on the future: Since they know they won’t be around as projects are completed and rolled out, workers planning to quit in coming weeks tend to show markedly less willingness to sign onto long-term projects. They may also pass up opportunities for training and development, and show less interest in advancing to higher positions within the company.
  • Less connection to work: As they begin to withdraw and their engagement level drops, workers planning to leave soon tend to display lowered productivity. They’ll come up with fewer new ideas and suggestions for innovation, and they won’t go beyond the required minimum effort.
  • Less social energy: Employees likely to quit soon begin to retreat from normal socializing at work. They become “more reserved and quiet,” and they also avoid interacting socially with their boss or other managers.

Employee engagement is a reliable indicator. Reviewing the problematic behaviors listed above, it becomes obvious that they all describe a worker who is not engaged. The direct correlation between engagement and retention is further demonstrated by the USU’s list of behaviors that don’t correlate with quitting: If you have an employee who suddenly schedules a lot of doctor’s appointments, shows up at work in a suit, or even leaves a copy of their resume on the copier, you may want to check in with that person — but (contrary to conventional wisdom) those actions don’t necessarily indicate that the worker plans to quit. And, interestingly, these non-problematic behaviors can all occur in a fully engaged worker. Predicting employee attrition, then, becomes a matter of being able to recognize lack of engagement, rather than other less reliable markets.

Developing your action plan

Using employee recognition as an indicator enables you to identify your most loyal employees. These top performers are the ones who are not only engaged in producing high-quality work, but they’re also the ones who reach out to recognize their colleagues and promote an atmosphere of warmth and recognition within your organization. Conversely, once you find out which people are most engaged with their coworkers, you can also more easily become aware of the ones on the opposite end of the spectrum: the employees who are retreating from engagement and showing signs that they might quit.

Recognizing coworkers is a solid sign of engagement

According to a recent Achievers study, it was discovered employees who were about to be promoted sent an average of 3.8 times more recognitions than their coworkers; meaning active recognizers are more likely to be promoted within their organization as opposed to non-active recognizers. Those employees who feel appreciated and engaged tend to reach out to express active recognition of their colleagues are more likely to stay than quit, and they’re also the ones you need to nurture and groom for leadership roles.

Once you identify the members of your staff who are in greatest danger of quitting, you can develop managerial practices to build employee morale and loop the outliers back into a sense of alignment with the company. A desire to be recognized and appreciated for the work that they’re doing is one of the primary reasons that people quit their jobs, and a Forbes survey found 79 percent of employees “don’t feel strongly valued for the work they put in.” That same article stated, “When you take into consideration the high cost of turnover and an increasingly improving job market, these findings ought to get you thinking about your own recognition strategies. How can you expect employees to stay at your organization if they’re not getting the appreciation they deserve?”

Don’t lose top talent and take action immediately by developing the right employee recognition strategy for your business. The more you increase employee recognition, the more you’ll increase employee retention and engagement as a result. To learn more about how you can increase employee retention through a culture of recognition, download our Ultimate Guide to Employee Recognition.

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Why Your Top Talent is Leaving

Forbes and CareerBuilder reveal why your top talent is leaving in 2014

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Have you heard the news? Your top talent is leaving this year—at least, Forbes and CareerBuilder seem to be convinced and have some tips to remedy the problem.

Forbes published an article about how CareerBuilder recently surveyed over 3,000 workers to find out who is most likely to change jobs in 2014, what employees value most from their employer, and most importantly—what it will take to retain them. Read more →