Practical ideas for small-business owners
It is a fact of life for small-business owners: You spend considerable time “investing” in an employee so that he or she meets your expectations through training and experience. Then, the employee suddenly leaves for another job, and you have to climb the learning curve all over again with a replacement. This frustrating process takes time and costs money.
How can you reduce employee turnover? Although there are no guarantees, one overall idea is to improve the general work environment. For example, every Friday afternoon, you might address some of the common concerns of your employees. Alternatively, you can try to schedule regular one-on-one meetings on a monthly or quarterly basis.
Some of the revelations from these meetings may surprise you. You may find that an employee is bored by the day-to-day routine of a job. Perhaps the level of compensation is an issue. Or maybe you need to spell out better guidelines for job performance. Still others may have special problems related to child care or other family obligations.
Keeping this in mind, here are several other practical suggestions for reducing turnover.
Offer new challenges. No one wants to stay in a rut. To avoid this problem, you may be able to emphasize an employee’s strengths by creating new tasks. For instance, an innovative employee may be asked to look into new product development. This may require the transfer of a worker to a different department or group.
Sharpen the skills of employees through training seminars. These seminars allow workers to expand their duties and identify how their particular talents can best be utilized. If you don’t have the resources for in-house sessions, you may be able to arrange for private seminars or courses at a local university.
Set flexible compensation standards. Obviously, it’s easier to retain key employees if you pay them what they are worth. Compensation problems are often rooted in an inflexible company policy. For instance, an employee who puts in extra hours may feel frustrated by being tied to the same salary structure as those who work strictly from 9 to 5. Result: An employer may have to throw out “the book” on compensation levels.
If the salary structure can’t be amended, your company may use other methods of compensation to retain valuable employees.
A few examples are deferred compensation packages, stock options, bonuses, additional vacation pay or time off.
Tell employees what you expect of them. Of course, a business manager must be able to recognize and appraise the work an employee does. But his or her responsibilities don’t end there. Case in point: Employees should know what is expected of them and what constitutes satisfactory or excellent performance. It may be necessary to write out practical guidelines and discuss them periodically with your employees.
This last idea should be an ongoing process that encourages communication between all parties. Otherwise, it might be a waste of time if employees do not receive any feedback from your discussions.