Solutions for your Biggest Problem as a Small Business
Does high-turnover distract you from running your business? Even if it doesn’t, how do you plan on retaining high performing employees in coming years? These are questions that are essential for running a successful business. These are also questions that have actionable, practical solutions that can help you manage your turnover and retention issues as well as improve performance. Yes, it is possible, and I will tell you how.
If you are like many of the small business owners we support, you may be struggling to find and keep high performing workers, which is critical to business outcomes like sales, customer service, EBITDA and Safety. For some companies, turnover is like a revolving door that never stops with one leaving and another arriving in a never-ending churn of employees. It can be consuming and quickly becomes a growing distraction from running your business. There are many reasons people leave their employer, and it even varies by industry. Typical causes include hiring the wrong person for the job, untrained and or incapable leaders, pay, benefits, commute and location, poor onboarding practices, and the list goes on.
Even if turnover is not an issue for you, staffing your organization in 2019 won’t get any easier unless you acknowledge and plan solutions for workforce trends. These trends have been confirmed now for years by leading research firms.
See if you can identify with one of the following issues: https://www.gallup.com/workplace/238085/state-american-workplace-report-2017.aspx
According to research, only 3 out of 10 employees in a given company are actively engaged in their work and providing discretionary effort. If the other 7 are not on deck, they must be down below?
Research indicates that 5 out of 10 employees in a given company are actively looking for a new job or watching for openings. What if they all “jumped ship” at the same time?
Additionally, 1 in 10 employees in a given company is fully disengaged—actively opposed to something or someone in their organization. That’s like having a stowaway onboard who will never be on deck!
Research also indicates a growing trend where employees focus more on their work environment, look for meaning in their job, and want immediate advancement opportunities. https://www.adp.com/resources/articles-and-insights/articles/e/evolution-of-work.aspx
As a small business owner, you know that immediate advancement is a tough expectation to match.
TURNOVER REDUCES PROFIT
There are many legitimate methods of accurately determining the cost of employee separation. Did you know that a separation costs at least 20% of the annual salary, and yet it is not reflected in your financial statements?
Do you know your turnover rate and the costs?
Turnover is time consuming and distracting. Did you know that just one employee separation can cost your business 20% of that employee’s salary?
Due to technology, today’s job seeker knows all about your company, what past and current employees say about you, and how to answer the interview questions you are likely to ask.
Are you confident your processes will select the right person for the job?
What’s that old saying, “unless things change, they are likely to remain the same!”
WHAT YOU REALLY NEED IS…
The purpose of today’s post is to advise small business owners that your annual business goals should include developing a sound retention strategy. Some of the components of that strategy should include:
Exploring the reasons people both stay and go through data collection and analysis, surveys, interviews, and investigation.
Predict which employees if any are likely to leave within six months, one year or greater than one year and determine what issues are important to each, e.g., pay, benefits, commute, relationship with supervisor, etc.
Assessing possible causes and determining whether the organization can realistically influence the issue.
Developing an action plan that will be effective and align with business strategy.
I want to assure you that there are practical solutions that can help you manage turnover and retention issues as well as improve performance and I am going to give them to you through a series of articles just like this one. But first, let me tell you a story.
One of my former clients had a workforce of more than 100 employees, and their business was to secure service contracts within their industry. Each contract required a crew of at least five qualified employees at varying skill levels including a lead operator. Unfortunately, they had a turnover rate of more than 35% per year, which often required them to pass up a bid offer because they couldn’t meet the staffing requirements. A majority of their turnover occurred within the first two years and much of it within the first 90 days. It was rare for them to get an employee past the two-year mark, so they were continually searching for lead operators. Their long-standing assumption was that their wages just weren’t competitive so there was nothing they could do about it. Fortunately, they agreed to work with me to consider a new approach.
Our approach was a three-step process:
Work on understanding employee engagement and identify practical solutions that first-line leaders could implement to improve retention and performance.
Set a goal to improve annual turnover by 20% of the previous year’s rate. Improve the 90-day turnover rate by 30% and build those goals into their annual bonus payout scorecard.
Provide support to the first line supervisors in implementing four primary solutions within their control.
After two years of hard work, the turnover rate was down to 18%. They maintained a steady supply of lead operators and they were making more money because they were confidently able to bid on more jobs.
Does that sound like a solution you’re looking for?
Lower turnover, higher performing employees, and higher revenue. End of story.
HAVING TROUBLE FINDING AND RETAINING HIGH-PERFORMING EMPLOYEES? Click the button below for FREE access to our latest resource about how to hire the right person AND keep them. It will give you action steps, tips, and information to help reduce turnover and help you build an engaged and productive workforce!