No matter what business you’re in, once you start hiring employees, you get into the people business. Employees are often a company’s most important investment, and labor costs can account for as much as 70 percent of total business expenses.1
With this in mind, some of the worst news a business owner can hear is when top-performing employees announce that they are moving on. It costs time and money to hire and train new people. Further, it can take a new hire one to two years to match the productivity of an experienced worker.2 Given that your business depends on dedicated employees, what can you do to hold on to talent?
Know every employee’s value
As a baseline, stay current on competitive salary packages for every key position at your company. Then make it personal: pay attention to what people are doing for your company, beyond their defined roles. Is there an assistant who is starting to manage larger-scale projects? If employees are growing their responsibilities, it’s time to boost their compensation package. Talk with a financial professional about new ways to reward people, such as offering whole life or disability insurance as an added benefit.
Know what every employee values
We’ve all heard of exit interviews, but does your company do entry interviews? 3 During the first week of onboarding, meet with new employees to hear about what they want to learn and achieve on the job. Ask them about things like their favorite projects thus far in their career, times they’ve felt “in the flow” at work, and their passions outside of work. Not only will this conversation build rapport with new hires, it will help you see all the ways they could be motivated to grow your business. And, diversity of perspective is a key driver of innovation in any industry.
Create the infrastructure for growth
Whenever possible, give your team the tools they need to do their best work. For example, could they use a 3D printer to build prototypes? If you can’t afford to buy a 3D printer, consider leasing one. Your goal should be to leave your employees feeling that their work is valued and to give them opportunities to develop their skills. On a different note, another way to encourage employee growth is to establish a mentorship program. Mentors can help new hires see the possibilities ahead and support them in their learning process. Whether it’s through working with a mentor, working with pioneering tech or other forms of learning, give employees what they need to continue to grow.
Demonstrate a culture of respect
Seventy-two percent of employees say that “respectful treatment of employees at all levels” is a “very important” aspect of job satisfaction. (The same survey found 61 percent of employees named compensation as very important.)4 In other words, don’t just tell employees what you expect of them — show them by your own example. Create a company culture based on clear expectations and transparency. Further, to communicate your business culture, give all hires an employee manual. It may not feel like you’re ready for the “formality” of a handbook, but if you have an employee, you are.
One of the great benefits of workplace technology is that it allows people to work where and when they wish. As much as possible, give your employees opportunities for flexibility. Keep in mind that home life has a different schedule than worklife and be aware of what’s most important to your staff. Is it important to people that work for you to pick up their kids after school? If so, give them the option to start earlier in the day or work from home in the afternoon. And remember: more flexible workers are often more productive workers.5
Business owners no longer operate in an era when people stick around for decades. Nonetheless, entrepreneurs can extend the average tenure through the right mix of increased incentives, flexible policies and positive company culture. In return, employees will bring strong work and loyalty to your company. When the balance strikes,, it’s a win for everyone. Be proactive about networking with other business owners to find out how they are getting creative and retaining their top talent, it just may work for you too!
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1 The Biggest Cost of Doing Business: A Closer Look at Labor Costs, Paycor, August 7, 2018
2 Employee Retention: The Real Cost of Losing an Employee, Peoplekeep, February 4, 2016
3 Why People Really Quit Their Jobs, Harvard Business Review, January 11, 2018
4 Employee Job Satisfaction and Engagement, Society for Human Resource Management, Nov 2014
5 Why a Flexible Worker is a Happy and Productive Worker, Forbes, January 15, 2016