Wait a Minute, There IS Something Harder than Hiring the Best People!
Last week, I wrote about the hardest thing in a business owner’s life: hiring the best people. I now stand corrected. There IS something harder and more important: keeping them engaged and productive in your company.
Today’s work environment has evolved into a mobile workforce where 10 years, or even five years, is a long time at a job. Employee turnover is a huge expense. Most articles I read state that turnover has a cost of somewhere between a third- and a half-year’s salary. Ouch. Not to mention that customer service, quality and other employees’ morale goes down during an employee transition.
So, here is Uncle Paul’s plan to help you retain the employees who really are the ones who serve your customers, run the business and bring dollars to the bottom line.
- Pay 5 percent above the market rate. You don’t have to go crazy here. 5 percent is a nice number.
- Manage your benefits to the advantage of your employees. Give them good healthcare. Yes, they will have to pay 25 percent of it. Most employees will be happier paying slightly more for a good plan than a cheap plan with high deductibles and co-pays.
- Set up a very good time-off plan. Give one week vacation during the first year, two weeks up to year five, three weeks up to year 15, and then four weeks. Some companies are giving four weeks at 10 or 12years. This will hold good employees at your company. They won’t be skipping to another place where they will start over with two weeks.
- Give five days for sick/personal days.
- Prepare and follow a proper employee handbook. This will repay you many times over.
And now for the important parts of employee retention:
- Train your employees well, and then let them do their jobs. They will learn more from their small mistakes then you can ever teach in your office. Yes, you do watch over and prevent the big mistakes, and then use these times for teaching.
- Give your employees real responsibility, and give them the authority to use their responsibility.
- Praise and share their successes publicly. React to the mistakes privately.
- Share as much information about the company as you can. Most entrepreneurs don’t reveal profit numbers, but you can discuss sales by area within your company. Talk about upcoming jobs. Explain where you are leading the company and why.
And, to me, this is the single most important thing:
- Do an annual employee review that means something. Take the time to prepare suggestions for each employee. Know their jobs and how well they are doing them. Train your supervisors in giving solid employee reviews. If you haven’t done this or don’t know how to really do it well, call me at 603-242-3521. I’ll be glad to give a half-hour phone consult, free, to USGlass readers.