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Stop Your Good Employees at the Door

Stop Your Good Employees at the Door

Do you remember the day you hired your first employee? Most business owners do. Your first hire is an important milestone in growing your business. Whether that was last year or a decade ago, you probably have a fond recollection of that day. You may even remember the name of that employee. Chances are pretty good, though, that employee is no longer with your company.

When you hired that first employee, did you think about what kind of a boss you would be? Did you fantasize about being the manager who all the employees wanted to work for, unlike some of the bosses you had along the way? Maybe you reminisced about the best manager you ever worked for and planned to follow his example.

More likely, you were too overwhelmed with the pressures of running your business to think about what kind of boss you would be. That is when your turnover problem began!

A high employee turnover rate can be tough on your bottom line, and your ego. One company I worked with was reluctant to admit they had a problem. After 25 years of business, and hiring dozens of employees, the size of the firm remained fairly constant.

A review of their personnel history revealed a long, slow pattern of attrition. They would staff up for a new project anticipating the residual growth, but by the time the new employees settled in, several old employees had left. The average term of employment was two years, and their hiring only served to fill in the gaps, never growing the staff significantly.

Not knowing their history, I suggested a round of hiring to staff up for future growth. The managing partner looked at me as if I asked him to run a mile. The management team wore themselves out in the hiring cycle and was too emotionally drained to start it up again.

We had to figure out why employees did not stay and grow with the firm to break this exhausting hiring cycle. Without knowing what was making them leave, there was no point to hiring new employees. Continued turnover would also drive away clients who lost confidence in the firm, and the firm would also get a reputation around town as a bad employer.

Hiring requires a two-sided relationship. You want to find good employees, and employees what to find a comfortable place to work. If your business gets a reputation for high employee turnover, good workers will not apply for your positions.

It is not possible to know every reason why employees leave. Some issues are personal or cannot be predicted. There are several common reasons employees head for the door, and many of these can be eliminated:

Lack of respect for the boss

Employees who believe they know more than the boss may get a slight ego boost, but in general they are not confident in the future of the company. Most people want to work for a boss who is knowledgable and can teach them more about their chosen profession.

Uncomfortable work conditions

Working with a boss who yells or colleagues who gossip is stressful. Even employees who appear to engage in the chaos of the work environment are not comfortable. When the work environment is unproductive or overly stressful, employees start considering their options. Each person has a different tolerance for stress, and when that quota is reached they will leave even if a better job is not available.

No career growth opportunities

Regardless of what they told you in their interview, none of your employees wants to do the same job forever. Even your support staff needs to see ways their jobs are changing and their value to the company is increasing. Employees want to learn new skills and take on new tasks and projects. When they feel there are no new opportunities for them with your company, they will move on to a job that holds new potential.

Difficult work

Some work is notoriously difficult, and people expect to be compensated appropriately. When the work is too tough, employees burn out quickly. Without adequate breaks and god compensation, employees will not remain in these jobs too long.

Low pay

No matter how much they love their jobs, people work to earn money. An employee may accept a certain salary when you hire him, but no one has the expectation of working for the same amount of money forever. You may be able to incentivize your employees with promises of bonuses and raises, but if those promises do not come true eventually they will give up and leave for a higher paying job elsewhere.

Feel unimportant

Employees like to be recognized for the work they do and feel like they are part of the team. If their ideas are consistently ignored, they will begin to feel unimportant. When you do not speak to your employees for long stretches of time, even though they are able to function without your invention, they will feel unimportant and seek the attention and accolades they deserve at another company.

After interviewing the management team at the 25 year old professional services firm, I learned that they suffered from most of these employee turnover problems. Their biggest problem was a lack of respect for the boss.

The members of the management team were highly accomplished and well respected professionals in their field. The lack of respect from the employees was not professional, however, it was personal. None of the managers made an effort to develop a rapport with the employees. Over time, loyalty to the management and the firm eroded.

The firm also worked their employees too hard. The competitive salaries they paid came with long hours and stressful work overloads with impossible deadlines. When employees left, they were not replaced quickly, causing everyone to take on more work or risk missing important deadlines that cost clients money.

Employees will work on crisis conditions out of loyalty to the boss, the firm, clients and their own careers, but this will not last forever. If there is no end to the crisis in sight, employees will give up and go elsewhere.

Make Them Stay

Approximately 78% of business leaders consider employee retention important or even urgent, so you are not alone. The cost of a dead-end hiring cycle adds up fast. Just start calculating the costs of salary, taxes and benefits on a monthly basis and you can see what you lose when an employee walks out the door. You don’t get that money back, and you have to invest the same amount or more to replace that employee.

For small businesses especially, the frustration and exhaustion of constantly hiring and training new employees can be an even bigger toll. When an employee leaves, the existing staff has to make changes to cover the workload. Then, hiring and training a new employees keeps everyone under stress for several more weeks or months. If this cycle goes on too long or too often, more employees will find it easier to leave than suffer through the stress.

Business thrives on routine. No matter what field you are in, creating repeatable tasks for each position gives your employees confidence and helps them know what to expect. Every time someone leaves the company and a new employee comes in, the routine is disrupted.

As an employer there are some things you can do to cut down on the attrition rate and help maintain an efficient and organized work environment:

Exit Interviews

When an employee gives his notice, it is probably too late to mend fences. But, you could learn something from this employee that can help you fix some problems moving forward. An exit interview could reveal information that is valuable to your business.

An exit interview should be scheduled before your employee leaves. This is not the time to let the employees know all of his faults. If the meeting is conducted properly, and the employee feels safe to be honest about his decision to leave, you will learn something helpful. Make it a non-emotional, fact-finding mission.

Similar to the hiring interview, you should ask open ended questions and then listen without judgement. People will tell you the truth if they feel they will not be penalized for any negative facts. You may find it difficult to hear what your exiting employee has to say. Welcome the information, though, and remain calm and respectful.

Get personally involved

Employees are people; sometimes bosses forget that part. People enjoy a certain amount of human interaction. It makes them feel important and appreciated.

As a business owner, most of your daily tasks take you away from your employees. They are expected to keep the shop open while you are out securing funding, doing research for new products and meeting potential new clients. Everyone is working hard, but separately.

Take some time to speak with your employees personally on a regular basis. Stop in to ask how things are going, if they need anything or to personally compliment their efforts. Be sure to interact with employees at all levels of your organization, not just your managers. When employees see you frequently, they will feel a greater connection to you and a loyalty to your business. They are also more likely to come to you with problems rather than just seeking employment elsewhere.

Refine your processes

Don’t make work any harder than it has to be. A streamlined process will help reduce stress for your employees. No one likes to be redundant or work in a chaotic environment. Take the time to update your systems periodically to be sure the organization as a whole is operating efficiently.

The first person to notice a problem with your work process will be the employee who is doing the work. Listen to your employees when they try to tell you there is a better way. If they do not bring you suggestions, ask them how their job is going and if they can think of any ways to make it easier.

Involving your employees in the creation of work systems and task assignments is a good way to be sure they are invested in the successful outcome. When you are ready to make changes, work with the employees to implement these changes rather than dictating to them. You will get greater loyalty from employees who feel listened to and included in designing their own work tasks. When employees see that you are interested in making their jobs easier, they are more likely to remain loyal to you and your company.

Re-evaluate corporate structure

If you want your business to grow, you have to be open to change. Starting your business probably did not include mapping out a corporate structure. If it did, there would be only one circle on your map – you. Then, you hired some employees to report directly to you and accomplish some routine tasks, so your business could get more done in a day.

Now, your daily routine takes you away from your employees more and more, but they still report directly to you. You may notice that when you come into the office everyone is lined up to talk to you about their next step. Your business schedule creates a bottleneck of workflow, and it is leading to a stressful situation for your employees.

Periodically, you need to re-evaluate your corporate structure, even if that only involves 5 people. You may need to add a middle management level, so employees have more direct supervision while you are handling executive level tasks. Assigning some oversight authority to someone else in your organization may get the work flowing again and calm the tensions among employees.

Provide growth opportunities

It can be hard for small businesses to attract and retain the best talent because they do not offer much growth potential. Employees may be excited about the opportunity to work with a developing company, but when they are ready to grow and see no place to be promoted to, they leave.

Every employees does not need a big fat raise or a promotion to management to be incentivized to stay. When you run a small business, you need to be creative with career development options to keep employees engaged and continue growing your business.

Start by finding out what interests each of your employees. Everyone has tasks they prefer within their current job and aspirations to learn and grow within the company. When you know what direction your employees want to grow in, you can work on creating a career path for them within your business, so they do not have to leave. The best career development strategy uses training and job growth opportunities that align the employee’s interests with your business development goals.

By employing some of these techniques, I was able to help that 25 year old professional services firm reduce their attrition rate and focus on truly growing their business. We revised their organizational structure and redefined some of the positions to fit more realistically into a regular work schedule. They also agreed to hire some more staff to permanently lighten the workload for everyone.

With these decisions made, we moved forward with a new hiring practice. We developed an on-boarding procedure to welcome new employees on their first day. The managing partner got involved by sitting down with each new employee on his first day, no matter what his position. New employees were educated about the history and functioning of the firm as a whole, and they could see how their position fit into the team.

The firm is now able to take on bigger projects without losing employees or over-working everyone to the point of burnout. They revised their corporate culture with an influx of new people and new ideas from the management team. With the successful implementation of those ideas, the firm is on track for real growth, and the current employees are planning to be part of that.

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