A Small Business Guide on How to Keep Your Best Employees
Every team needs to keep hold of their best players, read our tips piece and hold on to your biggest performers
It is estimated that the current employee turnover rate here in the UK is at 15% a year. A major survey by PricewaterhouseCoopers (PwC) a few years ago said that 10.4% of staff resigned from their job in the previous 12 months, which cost the UK economy £42 billion, based upon factors including lost productivity, recruiting and consequent training.
More recent research from the Hay Group has shown that since the “triple dip” recession, there is increased confidence within the job market and so employee turnover rates are increasing. By 2015, it’s expected that 765,000 more people will leave their jobs in comparison to 2012.
So why are people leaving? It’s not just increased confidence, or the prospect of getting more money. Here, we delve deeper so you can ensure you keep hold of your best people.
Think long term
The Hay Group’s research found that 31% of staff interviewed expressed a lack of trust and confidence in their senior managers. Meanwhile, a sizeable 47% said that they were sceptical that they would accomplish their career objectives at their current company.
To avoid these statistics becoming a reality within your organisation, give your staff a voice. This could be through employee surveys and regular appraisals, as well as a formal grievance system. Without these in place, there isn’t an opportunity for staff to raise concerns and they may see resignation as the only option available.
Whilst aiming for a management position may be unrealistic in some smaller businesses, people need to see the promise of career progression. It has been proven that feeling like an expert and having autonomy in their role is a key to job satisfaction. As such, it’s important to provide training opportunities to develop skills and, where promotions are unfeasible, look at sideways moves which can inject some variety.
Whilst some organisations may still be struggling post-recession, it has been shown that denying pay rises for the sake of controlling costs can be counter-intuitive, especially when it comes to your best employees. It’s important to consider the time and cost involved in recruiting and training a new person, as well as the consequences of the reduced productivity until the replacement person comes up to speed.
There is also the reality that the best case scenario rarely happens; the first candidate may not end up being right for the role and so the process starts over again. You also have to consider the effect of one of your best performers perhaps moving to a competitor. Whilst management shouldn’t feel bullied into decisions, it is up to them to ensure they regularly review employee pay to ensure the salary staff receive is linked to the value they provide.
Get to know your staff
Whilst important, money isn’t necessarily what keeps people at work. In fact, very simple changes can do wonders for motivation and loyalty. The ‘us and them’ atmosphere is antiquated, and a sure sign for high staff turnover. Studies show engagement is expected and essential for the bottom line.
Any manager should take the time to get know their team, taking an interest in what they do outside of work. Showing respect is important, so ensure teams are informed about important business performance; even ask for ideas for improvement. If there are any questions with complaints, they should be treated promptly with genuine concern.
Spending more time with your team may reveal talents you hadn’t witnessed before. With this in mind, managers should review career paths regularly and suggest well performing team members for internal promotions before a job advert is put out for someone new.
A positive way to show respect is to follow up on employee complaints, questions and emails with genuine concern and care. Don’t ignore them or treat employee concerns as irrelevant.
Learning from mistakes
People don’t always leave because of issues with the company; it could be down to a variety of personal reasons. However, before they leave, it’s a good opportunity to see if any improvements can be made, giving food for thought when replacements start.
Insecurity and defensiveness stops exit surveys taking place, but they are an invaluable exercise with criticism being the driver for improvement. Well before it happens, the transfer of knowledge and any personal connection should have begun. The exit interview should be used to yield final information when it comes to handing responsibility to someone else. Overall though, management should come away with feedback on the working environment, the organisation’s culture, management, development and processes and systems used.
Once you are ready to re-hire, doing the above allows you to give accurate and realistic expectations of the job role and help to tailor the induction, which will dramatically improve retention rates moving forward.
A changing landscape
Whilst some of the suggestions in the article may seem more obvious than others, one growing trend is how employees are increasingly concerned about the public image of the organisation they work for. Corporate Social Responsibility (CSR) has become more widespread in recent years, with companies expected to consider their impact on the environment and local community. This is reflected in corporate responsibility research from Ipsos where 61% of respondents strongly agreed that companies should ‘pay more attention to the environment’ whilst 52% felt they should ‘do more to contribute to society’.
This approach has been shown to pay off, too. For example, a study published in the Journal of Organisational Behaviour on green practices showed that employees of green businesses were 16% more productive. Meanwhile, firms who implement the ISO 14001 environmental management standard have been shown to be more profitable than those without.
This article was written by our business expert Robert Fenn of the British Assessment Bureau.