Over the last two weeks, we have discussed the important role employees play in the success of a business organisation. We have also discussed what qualities you should look out for in recruiting staff for your business. This week, we will discuss how to retain the good staff you have succeeded in employing.
Staff ‘turnover’ refers to the rate at which employees exit an organisation. It is calculated by dividing the number of staff that exit the organisation over a period, usually a year, by the average number of total staff over that period. A ‘high staff turnover’ means a relatively large percentage of staff leave the organisation in proportion to the average number of employees. A ‘low staff turnover’ means the converse. Though a high staff turnover is often disliked, it must be seen within the context of the business, industry and economic situation. Generally speaking, companies that engage in executing irregular contracts, such as construction companies, and similarly seasonal businesses like farming, tend to have higher staff turnover than those in, say, stable manufacturing industries.
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Within the context mentioned, a high staff turnover is disliked for at least a few reasons: It is a costly and time-consuming process to recruit good employees; You lose time and expertise when your staff leave and before you successfully replace them; Even when you succeed in getting a good replacement, it will usually take some time before they fully settle into your system for their maximum productivity, etc. So, how do you retain the good staff you have recruited?
Pay them fairly and reasonably well: At different career points of employees, the same things mean different things. At some stage, usually the beginning, a financial package is all that may be important and desired. At other stages, usually at middle and senior levels, job factors and non-financial benefits can become a lot more material. It is important you are cognisant of what will make the staff happy at which point in time and even location of their career.
Create an amiable environment: Various studies confirm that amiable environments enhance productivity. The most productive organisations are known to have amiable environments that are employee-friendly by being conducive, positive, supportive, etc. A Taiwanese business I interacted with has a large ‘Quiet Room’ in their exciting office where employees can go to rest, take a nap, freshen up and resume work!
Provide them with resources required to do their jobs well: One of the reasons many employees leave is because the organisations they work for do not provide them with the basic tools and other resources they require to work with. It is the responsibility of the entrepreneur and their executives to ensure that required resources are provided to employees.
Communicate and encourage employees to speak their minds: Poor or no communication can destroy an organisation regardless of the resources made available to staff. You should put in place a system of clear and honest communication and also encourage your people to speak up and communicate with others.
Reward performance: It is important that you have a fair and transparent system of rewarding high performance. High performers have, understandably, a desire for financial and non-financial rewards and recognition. Besides, people do what you reward. If you, therefore, want high performance, you must reward it in ways your staff will be happy with.
Don’t punish innocent failures: The most successful people and organisations are always doing so many things. Thus, it is no surprise that they also often ‘fail’. Interestingly, if they were to target zero failure as an objective, they are very likely to be a lot less successful. Consequently, you have to allow room for innocent and good-faith failures in your organisation. You just should have systems to support your people in what they are trying to do and be quick and responsive to managing the consequences of occasional failures without demotivating the employees involved. Have the good sense to laugh at some failures and learn from them.
Respect people: Even animals maintain social hierarchies and respect is often enforced in clans. Creating an environment in which there is mutual respect amongst employees regardless of position and status will go a long way in enhancing productivity through building the amiable environment we mentioned earlier.
Don’t micromanage: It is funny, if not pathetic, how entrepreneurs and executives recruit good staff and yet micromanage them. If you are looking for the top initiative-killer, look no further. Your best and confident employees will leave you sooner than later if you micromanage them. Giving free hands to staff within their areas of responsibilities engenders trust, confidence and is the fastest way of developing your staff for higher duties.
Train and develop your people: The world in general, and the economic and business environments in particular, are continuously changing. Just think how rapidly the COVID-19 pandemic altered the global business landscape within a few weeks. The only way your organisation can adapt and grow at the same time is if your employees are continuously developing themselves. In-housing mentoring, lectures, experience and knowledge-sharing as well as external training, attending industry exhibitions and business conferences, etc., are all ways that your staff should be available to to keep themselves abreast of developments.
You may have an excellent business proposition as well as wonderful employees. However, the two are only necessary but not sufficient conditions for business success. Another, not just important but also necessary condition for business success is ‘execution’, that is getting things done. So, next week, we will take up Business Development: Getting Things Done.