One of the top problems that our business owners face is recruiting, hiring and training top talent. In fact, whether or not you are tracking the cost of employee turnover (you should), according to the Society for Human Resource Management (SHRM) the cost of turnover for a salaried employee can be 6-9 months’ salary. So to put that in perspective, let’s say you have 10 employees that make an average of $50,000 annually. Other researchers, such as Stanford University, put that number higher.
If you lost 40% of your workforce, you have a turnover cost of $100,000-$150,000! If you have 100 employees that make $40,000 annually, we’re talking almost a million dollars that a 40% turnover is costing you. Would you like to have that amount added to your bottom line? Yes? So would we.
SHRM also suggests that for 2020, 47 million workers will voluntarily quit their jobs. That’s 1 in 3, which is up 23% from 2017. While not all employee turnover is bad, we do know that losing a great employee does much more to your business than just cost money. The team morale, the customer service, everything is affected when you lose a great team member.
One thing we do know:
Employees don’t leave jobs. Employees leave bosses.
Here’s some of the top reasons that bosses fail to retain great people:
Employees are overwhelmed. They’re silently sinking into exhaustion, and they don’t feel like they can communicate with their leadership team and be heard. A Stanford Study recently found that productivity sharply declines when employees work over 50 hours, and over 55 hours, the productivity declines so much that it’s not worth putting in the extra hours. It also found that employees that work 70 hours a week do the same amount of work as someone who works 55.
What can we do about this? Be present. Be available. Check in with your people regularly. Increase your Emotional Intelligence. And if people are overwhelmed, do something about it. Maybe it’s time to hire more people. Hire a business coach to help you set up some systems.
The team is not all on the same page. The goals and direction of the company, not just financially, but in the mission and vision of the company, could not be more important to the owner. Right? But have you communicated this with your team? Is the vision of the company communicated regularly to every level within the organization, not just the C-Suite? If not, employees that are flying blind are bound to be unhappy.
How do we get everyone on track without divulging too much of the sensitive financial data? We hold an alignment. In a fun, non-intimidating way, this Team Day is critical to the focus of the team. During a Team Day, which we recommend be facilitated by a non-employee/owner, can include communication of the owners’ vision, some teambuilding activities, and setting rules of the game. The team walks away having relaxed, gotten out of the day-to-day of the business, and are aligned to the goals of the business owner.
Employees don’t have a say. This is not to say that the owner doesn’t get to make final decisions on the direction of the company. But employees whose opinions are heard and valued are more likely to stay with the company. You hired these people because they could be a positive contributor to the company, why not use their knowledge? You very may well find an idea you didn’t think of.
That’s easier said than done, right? Wrong. Let’s say you are trying to implement changes across the entire company. In fact, this happened with a client recently. They had a large team across multiple states, and they needed to get systems written down so it was consistent across the board. In order to create employee engagement, and to get the opinions of the great people in their organization who were going to actually execute the plans, they put together a team of people from many different levels and locations to develop these systems. This way, it was not just an edict from above and they had a team of people who could advocate for the new systems and the changes in the organization to get the buy-in of the rest of the team.
To be continued…
Pete, Peg & Michelle
Want to know more about ways to decrease your business’s turnover rates? We’re here to help. Connect with our global award-winning coaches today and we can set up a complimentary one-hour consultation or training ($500-$2,000 value) to see the opportunities in your business.