4 Ways to Avoid Losing Key Talent
Turnover in an organization brings a high cost to the company; and, unfortunately, much of that cost can be avoided. The impact is not only monetary, but it also affects the organizational culture and potential legacy of the company.
We are always following turnover trends. Dan Schneider, a succession planner with The Rawls Group, says findings from the Saratoga Institute, a group that regularly reviews and updates the financial and organizational costs of turnover, estimate the financial costs range between 12-40% of pre-tax income. This translates to anywhere from $120 - $400 of every $1,000 pre-tax profit is absorbed in turnover costs. And this is just the beginning in calculating the cost of turnover. If you are looking to grow or build a foundation for business longevity, the cost of turnover can exponentially grow due to a poor reputation as an employer making it a last resort for potential employees. This can make recruiting and retention much more difficult and it dramatically changes the caliber of talent of the applicant pool.
Renay Winston, president of People Management Solutions, said there are costs beyond the financial ones. He works with clients to help them understand that costs can also be found in low employee morale. The turnover burden increases workloads and responsibilities of others. Decreases in productivity occur as new employees need time to learn their roles, and customer service starts to diminish as a result of having inexperienced or unmotivated employees.
The sad reality is that retaining talent is not all that difficult. As a multi-unit franchise owner, you have to commit to making retention a priority, while building a culture in which potential employees wish to work. We asked Schneider and Winston to share their collective perspective on how multi-unit franchise owners can take the reins to own recruiting and retention. Here are four key areas they recommend you focus on to help you start bridging the gap between turnover and retention:
- Ensure compensation structure is competitive - The franchise industry is one of the toughest to ensure competitive compensation - but it is possible. Be intentional about knowing what your competition is offering. Consider building a compensation structure that is not based solely on the wage itself. For example, take an innovative approach to your shift/hour options and allow employees more flexibility. Or create a "coverage" calendar where employees can change shifts with others.
- Focus on keeping employees motivated and engaged - One of the most critical areas for all organizations is employee engagement and motivation. Not all employees are motivated the same. Once you know what motivates your people, you can better tailor programs, options, benefits, and compensation to create a more engaged workforce. Survey your team and ask questions about what motivates them, be curious to understand what makes them tick and keeps them happy, you might be surprised.
- Invest in helping them grow personally and professionally - Create a culture of helping individuals grow. You need this for the incoming generations of workers. They want to be better at their job and in their life, too. Identify areas in which they would like to grow and help them achieve it.
- Communicate clearly and often - Last, clearly communicate and often - expectations, feedback, encouragement, and organizational items. Also, allow your employees a mechanism to provide feedback to you through one-on-one meetings or as part of a survey.
Today's environment requires leaders to be intentional about getting close to their people. Turnover begins long before the person is offered a position elsewhere. Remember to keep your mission, vision, and values top of mind with your people (and especially during the interviewing process). Take a critical look at how you are performing your values. Look at your managers and ask yourself if they reflect what you want your organization to be.
Retain your key talent and become an employer of choice! Build a culture that grows your people both professionally and personally, and intentionally invest in their future. Treat them with so much dignity and respect that it makes it hard for them to ever want to leave.
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