eBusiness Blog

Employee Retention: Why They Leave You… and What it Costs

What Do Your Employees Really Think?

Employee Retention: Why They Leave You… and What it Costs I had a client who thought they had a “people issue”. The effect of this people issue was a decrease in the profit margins although their sales were increasing each month. By taking a diagnostic account of the cultural health of the company, I discovered some pretty alarming statistics. The rate of turnover for the company was over 50% per year. That was about 15% more than was usual for their industry. Employee turnover costs can be staggering. Employee turnover costs are staggeringMy estimate, which was supported by SHRM, the Society for Human Resource Management, is that it costs over $5,500 to replace one minimum wage employee earning $12.65 per hour (BC’s Minimum wage) when all costs of recruiting, interviewing, hiring, training, reduced productivity, etc., are considered. The same SHRM report estimated that replacement costs amount to 30-50% of the annual salary of entry-level employees, 150% of middle level employees, and up to 400% for specialized, high-level employees. How’s that for a bottom line shocker? Retaining employees is an essential part of both workforce optimization and business productivity. Employee turnover generally causes disruption, expense, and recruitment costs, so it is an imperative for most companies to increase retention rates and grow their employment brand and reputation.

So Why Do Employees Leave?

In my next few articles, I will cover a series of reasons for poor employee retention that will surely affect your business and your employees’ trust in you. Today, let’s cover why they want to leave in the first place:

They Don’t Feel Valued

Only 1 in 5 Employees Feel Fairly Paid
43%
of employers say their employees
are paid fairly
64%
of workers are paid the market rate
21%
of workers think
they are paid fairly
35%
of overpaid workers think
they are underpaid Based on a survey by PayScale.com

Signs your employees don’t feel valued:

  • Triangulation – They complain to a cohort about their work, not being paid enough, not being appreciated – but problem still exists and others are negatively affected.
  • Distress signals – lack of productivity or quality of work, apathy, social distancing from colleagues, unhealthy behavior
  • Low Trust/Low Morale – only 22% believe that reasons for lack of pay increases are due to the stated budgetary restraints. 33% reported that their employer provided no rationale for their decision to deny a raise.
Whether workers believe in the rationale provided by their employer, it has a big impact on their job satisfaction and intent to leave. When asked if they were going to look for new jobs in the next 12 months, over 50% said yes, even if they received a raise in pay. If they were denied a raise, that statistic increased to 72%. This is a huge concern for businesses, large and small. So how can you make changes in the organizational culture to engage your employees so they feel valued, appreciated and engaged?  Leave a comment below or contact me to discuss! [article_about_author author="joanne"]

14 Tips to Keep Your Best and Most Productive Talent

14 Tips to Keep Your Best and Most Productive Talent What would your organization’s culture be like if everyone came to work, every single day, with anticipation of only great things happening? Problems would be resolved and relationships would deepen within the teams and mentors. Can you envision your people happy at their job, fully engaged, focused and performing their best? Well, it’s now up to the leadership team to ensure this happens. The last three blogs that I wrote covered the steps to recruit, select, and “wow” your new talent on their first day at your organization. However, the hardest task is to keep them working productively for you. Understanding what motivates any employee is critical in assisting them to reach their highest productivity. Companies, large and small, are realizing that turnover is often their largest unnecessary expense...but that can be rectified. It is interesting that some local companies are so concerned about younger members leaving them short-handed, they have decided not to hire anyone less than 28 years of age! That is going to cause a huge succession issue for the organization down the road. Other businesses are seeking workers outside of our country to acquire the right talent and attitudes for their company. This is hardly a solution for all companies, and our future generations are being affected.

So... what are some of the key motivators for employees to stay?

  1. Being heard and seen as a valued person
  2. Having confidence in the organization’s leadership
  3. Liking the work that they do and using their skillset
  4. Having made progress each day or week

What Can You Do?

Gain as much information on what motivates each of your employees at work. Be curious – ask questions, and create a relationship with each of your employees. Ask them to be specific – what excites them; what are they passionate about; if nothing stopped them, what would they be doing in five years from now? Here's 14 vital motivators... and it’s not necessarily money:
  1. Give Them A Sense Of Belonging. Talk to them. Find out what they’re passionate about, and let them know how that fits with what the department is doing.
  2. Demonstrate And Be Accountable. Show through your actions that you value their skills, enthusiasm, comments, creativity, and eagerness to learn. Tell them. Give feedback…and expect it back, when you ask, “How can we help you?”
  3. Offer Interesting Or Challenging Work That Pushes Them To Grow. Yes...you’ll need to know them well enough in order to place them in appropriate departments, teams, or projects.
  4. Have Them Work With A Boss And Co-Workers They Like. This suggestion is easier said than done, but you can arrange a meeting with the team manager to ensure it’s a good fit before they begin.
  5. Share A Mission Or Purpose They Believe In Or Want To Support. If you support a global or community cause, your employees can be excellent advocates for your company. And, this is where you will see some budding leadership skills surface.
  6. Compensation And Benefits. Always offer a salary that is equal or better than what your competitors are offering. State when or if you will review their salary. Make it very clear what they need to accomplish before an increase will be considered.
  7. One-On-Ones. Carve out a regular time each week to get a ”health-check” of your employees. They need to know how they are doing; where they can improve, and that you have their back. Recognize, value, and encourage them. Keep it casual as you pass by their station.
  8. Build Their Confidence On An On-Going Basis. New recruits are often nervous and unsure of themselves. They want to please you and are worried that they may disappoint you.   Remember, we’ve all had a “first week” somewhere and that it got better as time went on. For the first several weeks of training, catch them doing something right…and say something.
  9. Create A Safe Place To Work And Learn. New recruits will appreciate a welcoming space where they can learn and interact with leaders of different ages, experiences, and titles. Often meetings like this will have more value than a promotion.
  10. Give Examples Of The Performance You Expect. Visuals, examples, flow charts, or previous projects should be offered to your new employees so that they understand the caliber of work you want.
  11. Innovation And Change. Encourage ideas and input from your employees, even if they are young; be realistic with them about how new ideas will be processed. The key point is that they will be heard and considered, with a follow-up action.
  12. Mentoring. Mentoring, both up and down the organizational ladder can support and encourage employees to succeed. Both the younger recruits can learn from their more senior mentors, while the senior mentors will learn so much from the younger employees.   Not only does this duel mentorship build relationships, but also it is a cost-effective way of improving motivation, clarity and productivity.
  13. Continuing Education And Professional Development. We live in a world where technology and methods are changing at warp speed.   Life-long learning is a necessity, so it’s important for you to decide what extra training the organization will sponsor.
  14. Work-Life Balance. These days, the employee is given a larger task list with a shorter timeline. This leads to a stressful thought, “I am not getting paid enough for what I do”. If an organization has a solid practice of reducing work load on employees and thus giving a better work life balance then it would also follow that the employees are more likely to view their compensation as fair.   The organization will also see the benefits with less absenteeism, stress, behaviour issues, tardiness, and leaving.

The Good News?

If you take action on even a few of these steps, you’ll rarely get a resignation letter. [article_about_author author="joanne"]

8 Tips to Ensuring a New Hire’s First Day Forms a Long-Lasting Relationship

8 Tips to Ensuring a New Hire’s First Day Forms a Long-Lasting Relationship In my last blog, I discussed some ideas on finding the “right” talent for your business with questions that get more pertinent information during the interview than the usual methods. Now you’ve chosen the ideal person and you have only one chance to make a positive “First Impression”. If their first day at work is less than warm and welcoming some of the younger employees may choose to leave-- just as fast as they arrived. You’re likely rolling your eyeballs at that comment; but it is happening. All employees want to feel valued right from the get-go and it really takes very little effort to engage your new talent from the start. Here are some ideas that you may like to take into consideration:
    Women working as a team
  1. Take a few minutes to introduce your new recruit to the team.   It can be on an individual basis, or a brief meeting with all.  State the attributes of your new employee and how you see them fitting in with the team or business.    Tell everyone what their new colleague will be doing within the department.
  2. In addition to an introduction, take a photo in front of your logo (with their smartphone) so they can post their new job on social media. It will be good promo for them and you!
  3. Give your newbie a swag bag containing items that they’ll need in their job. Company pens, pencils, note pads, post-its; a list of department staff with their positions and contact info and an employee handbook.
  4. You can surprise them with a gift certificate to take the day off on their birthday, with pay (Millennials will LOVE that).
  5. Have their favorite muffin and coffee drink delivered to them at the break.
  6. Send them a “welcome” card that says how pleased you are they are part of the organization.
  7. Have a cake, or muffins and hot beverages for the whole team to welcome the new employee.
  8. Create a promissory note or appointment for the employee to meet with the CEO for a 15-minute chat.
These actions don’t need to take a lot of time, nor money, to impress the new employee and the rest of the team. Introduce a “work buddy” for the first few days to guide the employee through the routine and layout of the organization.  Believe me, there is nothing worse than just saying, “welcome” and then leaving the recruit alone to fend for themselves. Remember how awkward it was when you started a new position.  This is especially true for young people who still lack confidence and experience in the workplace. Lastly, meet with them at the end of the day to see how things went, and to ask what they might need to make it better the next day.  Let them know they did well on their first day and that you’re glad they are part of the team. You will have impressed them and they will be more than willing to look forward to working with your organization for the long term. [article_about_author author="joanne"]

3 Strategies on Hiring the Best Talent for the Job

3 Strategies on Hiring the Best Talent for the Job

Eight Sample Interview Questions to Help You Hire the Right Person from the Start

Choosing and then losing your talent is one of business’s highest and most time consuming costs. Whether you are the owner, manager, HR Talent Recruiter or the CEO of your organization, the trials and search for the right people who will be productive, engaged members of your team may need a new approach. I believe spending in 90% of your time finding and hiring the right candidate; while the other 10% of your time is ideally spent on firing or letting the unproductive member go. In many cases, the reverse is true. I hear these excuses from management all too often:
  • "Give them another chance."
  • “Maybe if I gave them more training.”
  • “I’m sure they’ll improve or change with more time (or more motivation).”
Before you start to wonder if you’ve made a mistake, let’s take a look at some ways to avoid the standard interview. Here are three key principles that can help you hire the right person from the start:
  1. Be Creative

    Update your questions and throw in some curveballs that make the candidate think. Get to know them better. Take them on a short tour of the business and observe how they interact with the people you introduce them to.   Does the person seem genuinely interested in the work of the company? How do they treat others with respect and equality?   Perhaps sharing lunch at a restaurant will give you some details that will cinch that decision from your short list. Notice if they are polite, respectful, demonstrate good communication skills, or handle problems easily. Often a person’s behaviour and personality becomes clearer during a less formal environment.
  2. Have Clarity

    Know the job that is being filled. Not just the job description, but also the type of personality that will fit best in that department, the skills and behaviours that are required. Be clear on what training is provided and how they are evaluated.   By knowing the organization’s values and priorities you can ask questions that will determine their values and whether there is a fit. Know the goals of the department’s supervisor so that you fully understand the job, the environment, the attitude and behaviours needed for the most ideal recruit.
  3. Create Unusual Interview Questions

    Ask questions that allow you to really KNOW the candidate. SAMPLE INTERVIEW QUESTIONS TO ASK:
    • How do you envision your ideal workweek? (If they have previous experience, then you can ask: “Tell me about your regular daily routine at your last job.”)   You’ll discover what type of work environment or team dynamics help them to be most effective. You’ll learn how they approach their workday, how much autonomy and structure they had, and how passionate they were about their work.
    • Tell me how you have used your problem-solving skills and leadership in any capacity: work, school, or clubs? (This is a great question, particularly for those with little work experience.)   Even if their skills aren't an exact match for what they'll be doing at your company, they may be able to tell a succinct story with a clear point where those communication skills will come in handy when the employee encounters a variety of challenges in the new role.
    • What would you do if you got behind schedule on your portion of a project?   Their answer will give you some indication of their time management and problem-solving skills, as well as how they would seek advice or assistance to complete a task on time.
    • Give me an example of a situation when you worked in a diverse group with different opinions.   The candidate’s answer may be a red flag if they did not have good examples of inclusive behavior and collaboration.
    • How do you like to receive feedback?   You’ll discover the best way to communicate with them and whether or not they are sensitive to feedback, both positive and negative. Balancing this with your internal culture will be important and may need to be adjusted accordingly.
    • Can you tell me about a change or new idea that you wanted to get through at your last workplace (or class), but were met with resistance?   You’ll learn how they deal with challenge and if they gave up or made it happen.
    • Imagine we've just hired you. What's the most important thing on your to-do list on the first day of work?   Their answer will give you a sense of organization, prioritization, judgment and decision-making skills.
    • Tell me what you would do with $50,000.   This is a powerful question and its answer will determine what motivates the candidate and, if properly nudged through genuine conversation, will encourage the person to be more engaged, collaborative and valued.
With this type of approach to hiring new talent, you will find the perfect person who will make a great addition to the team! [article_about_author author="joanne"]

Is Employee Turnover Costs Robbing Your Profit?

The key to reducing high turnover and its associated crippling costs

Employee Turnover Costs Robbing Your Profit In this case size (business size, that is) doesn’t matter. High turnover costs are a significant problem for all businesses. However very few discuss the true extended costs and the multiple ways that it impacts the business.

Would it surprise you to know that it can take anywhere from six to nine months wages to replace and train a new replacement?

I’ve calculated some exact stats. Let’s take a minimum wage employee who leaves the company, sometimes without notice. Not only will productivity get a hit, but also some of the emotional effects. They include shock, frustration, and stress not only for the hiring manager, but also for those employees who have to take on more responsibilities, and grieving the loss of a colleague and friend. Let’s assume the hiring manager is earning $90,000 a year (roughly, $43.00 per hour). It will take hours from their work day to finish the exit paperwork, release an ad to find another candidate, review applications, interview and select a new recruit. Then, there is onboarding and training to get the person to the same level as the latest employee. In simple terms, the total of separation costs, hiring and pre-employment costs, and training costs will be $5,300.00 to replace a minimum wage employee. Losing a Millennial employee can cost the company $15,000 to $25,000 but it’s actually a lot more when you weigh in a few additional variables mentioned earlier. Other research shows that turnover costs can add up to 213% of the salary for a highly trained position! So if a highly trained executive is making $120,000 a year, the true loss could be up to $255,600 to the company! The key to reducing high turnover and its associated crippling costs is to take time... much more time... to choose your new hire than ever before. The hiring and training processes have changed and it still surprises me that businesses, of all sizes, often spend very little time to find their next candidate. Why? The onboarding process takes time and most managers are run ragged and can’t prioritize the appropriate time for choosing the best talent. Glancing at an application or resume and saying, “When can you begin?” no longer serves you. In fact, all employees, especially the Millennials, want to feel they will be engaged, valued, challenged, and well trained. They will require continuous learning opportunities. Mentoring is one of the most effective, cost efficient ways of increasing employee longevity benefiting the mentor, the mentee and driving significant retention.

Your business relies on the talent you hire.

Carve out the time to have a conversation with your employees to see how they are doing, what challenges they are facing and how you can support them. This is just the beginning of hiring and retaining your best people. But now, you’ve been reminded of the consequences of hiring on the spot or not taking the steps to value and prepare your hires for a great job with you! [article_about_author author="joanne"]