Reducing Turnover: How to Make Your Employees So Happy They’ll Never Want to Leave

What keeps business owners awake at night? What is most talked about but least done about? Which single issue can eat up to 40 per cent of businesses’ net profits yet remains a hidden cost?

You guessed it: employee turnover.

The challenges with this issue are as complex as business itself, and there are no quick fixes. But it’s not beyond your control. Employers and managers can do plenty of things to reduce turnover and retain those hard-working, loyal employees who are critical to business success.

One thing is clear: for 21st-century employees, it’s about a whole lot more than the paycheque. People want to be treated with respect and know that their boss cares about them. Believe it or not, that was the number one answer given by employees in a recent worldwide study by Towers Perrin. People want to be treated like a valuable resource, not a disposable asset.

The results of the survey were a major reality check: although 90 per cent of employers said that their employees were their most valuable resource, only eight per cent of the 88,000 employees surveyed said they felt as though they were the most valuable resource. There is obviously an enormous chasm here between “saying” and “doing.”

The timing could not be better to set some clear goals for your company on employee retention. Despite the recent economic downturn, the talent wars are making a comeback and employee retention will be the most important competitive edge a business can have. The benefits go well beyond merely affecting the bottom line.

According to award-winning economist Roslyn Kunin, in the next five years, this issue could “make or break” a company. “Employers must learn how to be good bosses,” she recently told a crowd of Kelowna business owners. The tricky part is knowing where to start. Business owners are inundated with “best employer practices” and “50 best companies” and there are countless examples to follow. Here are some key pieces to a complex puzzle.

1. Don’t copy your competitors. The urge to emulate what others are doing in hopes of producing happy employees is tempting, but mostly this just doesn’t work. The flavour-of-the-week approach can be both frustrating and costly and is ultimately ineffective.

The key is to develop an employee retention strategy that fits your business culture.

2. What do you stand for? Why do your employees stay? What do they need more of? Ask them: you’ll be surprised.

Brandie Yarish, director of talent and culture at Genologics, a Sidney-based software development company, says that if you don’t understand and shape your own culture, you get “culture by accident.” Instead, she developed a foundational road map for her company where corporate values were well defined, clear, and compelling. Everything else was built around those values.

If you don’t know what your organization’s culture is, find out. Ask, observe, communicate, and develop the positive aspects of it and have the courage to uncover the less desirable aspects.

3. “Employee orientation” is more than a buzz phrase. The first day on the job is critical to the formation of that employee’s opinion of the workplace. The connections they make that day stick for the remainder of their career with your company — make sure they are positive! If you hand over your fledgling employee to the most jaded, bitter member of your staff, don’t be surprised when the new employee adopts that attitude. Find out who the stars are in your company, the ones who naturally flow with enthusiasm, and give them this all-important task.

Jennifer Hawes, co-owner of Cold Star Freight in Langford, ensures that all new employees have at least one informal mentor to connect with in the first week on the job. This ensures that new employees have someone to go to with questions, to review procedures, and to gain the confidence they need to be a productive part of the team.

4. Communicate like never before. Employees want and need to know what is happening in your company. Tell the truth. Open and honest dialogue with employees at all levels builds trust and respect, two more key pieces of the employee retention puzzle.

Find out the rumours that may be thwarting progress or causing conflict. While running a company with 30-plus employees, I found that the best way to deal with the (always churning) rumour mill is to bring it out into the open. I started an employee newsletter column called Rumour Buster and encouraged employees to bring forward rumours they heard, and then addressed them in honest, straightforward language.

Encourage dialogue by using staff names, not titles, and ask for feedback and suggestions. Throw out that old, tired “employee suggestion box.”

Instead, create your own format where employees can have real input into their jobs and surroundings. But this comes with a warning: Don’t ask for input if you have no intention of hearing it. Better not to ask at all than to suggest that you want to listen but don’t have the capacity to do so. It’s not easy, but as Greg Sager, owner of Sager’s Home Living in Victoria, says, he listens carefully in order to understand the most important issues his employees may have.

“It doesn’t always come out the way you think it might,” he says. “Sometimes a grievance can be masked in humour, and I have learned to listen very carefully to what staff are saying to get to the heart of what it is they’re really telling me.”

Sager knows the value of being a good listener, and his staff reap the benefits as well. A good rule of thumb for leaders is to listen more than speak and to ask questions more often than give answers.

5. The carrot-and-stick approach isn’t particularly effective. Employees want to know that their employer cares about them as a person. This takes genuine commitment on the part of supervisors and a desire and natural affinity to care about people.

Employees also need to grow and develop. Give them challenges and training opportunities to become fully engaged, productive workers. Maureen Gardin, co-owner of Bean Around the World Coffee Shop in Victoria, says of her employees, “If they’re ready to take on new challenges, I give them every opportunity to succeed.”

6. Create an atmosphere of respect and support. Work relationships should be positive. There is no quicker way to lose staff than to immerse them in a negative environment. This is particularly true in small business, where lateral transfers are just not possible.

The old adage “people don’t quit companies, they quit bad bosses” still applies. Review your harassment policies, but more importantly, find out what is working well and nurture it.

7. Create opportunities for fun and for team activities. If you’re thinking, “I’m here to do business, not to have fun,” learn about — and be inspired by — some of the amazing results from small companies who have incorporated these practices into their culture. Not naturally inclined to encouraging fun on the job? Find someone in your organization who can and, while you’re at it, give them a new title, “director of fun.”

As a successful business owner, you know well the importance of good client and customer relationships, so take those same priorities and values, apply them to your employees, and watch the results. As Darlene Bailey, president and CEO of WCG International says, “We need to mirror the culture that we want for our clients by demonstrating it to our staff. Our staff matter and they are valued.”

Reducing employee turnover is a puzzle. But like any good puzzle, if you have a picture of where you’re going and what it is you hope to improve upon, you’re halfway there.

Create a workplace where staff are valued, have a say in how they do their work, and are challenged and respected, and you’ll reap the very tangible rewards of employee retention, along with a happier workplace, increased productivity, and improved bottom line.

Written by Dawn McCooey for Douglas Magazine.