3 Ways to Help Reduce Employee Turnover
One of the best ways to grow and expand your business is to have and maintain quality employees who are dedicated to helping your business succeed, and while a steady turnover rate is both natural and even healthy for many businesses, excessive employee turnover can be an expensive and time consuming waste of valuable resource especially for the small business owner. According to an article published by the International Franchising Association® written by franchise owner Harold Jackson, employee turnover can cost the small business owner anywhere between $700-$1,000 per employee.
Between uniforms, tools, and hours of training, each employee becomes an investment of both time and money that are lost as soon as an employee walks out of the door. Not to mention, any unhappy employee leaving on poor terms, can be counterproductive to your business and advertising. According the Global Development Learning Network, every dissatisfied customer expresses their frustration to anywhere between 9 and 15 people. However, the frustration of an employee can be even more detrimental to a business than a customer’s opinion in the eyes of prospective new customers. Therefore it is critical that when employees leave, they leave of good terms and not at an excessive rate.
So, how can small business owners avoid the costs associated with high turnover? According to Robert Tunmire, executive vice president at The Dwyer Group®, there are three main ways that the small business owner can reduce the amount of high employee turnover in their business.
Recruit the Right People:
Hiring the right people for the right position, the first time, is the first step in reducing employee turnover, and ultimately, it can save a business owner a substantial investment of both time and money in the long run. While it may be tempting to fill a position as soon as possible, business owners should carefully consider not only the candidate’s credentials and references but also their long-term potential in the company. Ultimately, supervisors should evaluate the fit of the potential employee with the personality of both the specific position that they are being considered for as well as the company that they will be representing.
When evaluating a potential candidate, consider asking yourself the following questions:
Does this individual exemplify the image that I want to promote in my company?
Will this employee be able to connect with other employees well?
Is this person a team player?
Fairly Compensate Your Talent:
Compensation and benefits plans are a consistent way to show and reinforce how employees are valued in a company. Forbes Magazine recently published an article entitled, “The Only Good Reason to Quit Your Job.” Topping the list of complaints that may encourage people to leave their positions included both feeling underpaid and undervalued. So when structuring payment and compensation plans, keep the following tips in mind. Compensation plans must be:
Simple- Complicated compensation plans are difficult to understand for both the employer and the employee causing errors and fostering distrust amongst staff, and a lack of trust can lead to increased levels of employee turnover no matter how much employees are paid.
Transparent- Be clear and honest about an employee’s paycheck. Allow your staff to easily see how you itemize any deductions or bonuses.
Motivate your staff:
Motivate your employees by implementing a fair a compensation plan.
As discussed earlier, paychecks and benefits are one tool to reaffirm an employee’s value to the company. Whether it be a technician or an office assistant, if an employee feels as though they are being undervalued through a low pay check or poor benefits it can influence their decision to search begin applying to other businesses.
Motivate your employees through team dynamics:
Motivate people using goals and small wins by establish monthly targets and focusing on beating your company’s previous records. When setting your company’s goals, both short and long-term, keep the following acronym in mind: S.M.A.R.T. All goals should be Specific, Measurable, Achievable, Realistic, and Timely.
Motivate employees by rewarding performance at every available opportunity. You should reward your employees in small ways throughout the year whenever possible. Rewards don’t have to be large or substantial, and they come in many amounts, shapes, and sizes. Free company paraphernalia such as T-shirts, coffee mugs, and mouse pads, can be more motivating to employees if regularly distributed throughout the year than even an annual bonus because they are consistent reminders of both future goals and past achievements.
So to be proactive about keeping your best employees, remember: recruit the right people, fairly compensate your talent, and motivate your staff.
To start applying these management tips to your new franchise in the near future, contact The Dwyer Group by visiting our website at www.leadingtheserviceindustry.com or by phone at 1(866)-656-1504 for more information.