Studies have shown that high rates of employee turnover can cost a company upwards of 40% in annual profits. For a business, particularly a small one, that’s a significant amount. In addition to a loss of profits, high employee turnover impacts employee morale, productivity and efficiency. So, how do you combat it?
There is no hard and fast formula for hiring good employees or for retaining them. Each situation is unique to that particular business. However, there are three general themes that can typically be found in retaining employees.
First is to consider a company’s core values. Do you know what the core values of your business are? Have you effectively defined and communicated to your employees what they are? Secondly, communication and listening is paramount. You’ve probably heard about it many times before, but never under-rate its power in retaining and keeping good employees. Employees want to know they will be heard and that their ideas are heard. The best part of all for the employer is that this isn’t an expensive tool to implement, but the return on investment can be significant.
Finally, connect and build a community. This doesn’t mean you have to take your employees out to lunch every day or have them over for Christmas dinner, it simply means being aware of who your employees are and what’s happening in their lives. With as much time as Americans spend at work, for many, our co-workers can quickly become like a second family. And, that family can either work well together and get along, or be so dysfunctional from bickering, backstabbing, and politics that it breaks down the very fabric of the company. As a business owner, which would you prefer? Which environment do you think would attract and retain good employees?