People Power: Profits Depend on Strong Staff Retention
Many companies claim that people are their most valuable asset, but the most admired and successful companies show it. In handling the human resource area for three organizations, I know that retention is not a human resource issue; it is a management issue. There is a direct correlation between high retention and profits. Turnover costs organizations 30% – 150% of the annual salary of an employee (even more for higher level or specialized employees). Businesses can improve this area by having a retention strategy that is part of the management culture and training.
Don’t let your key performers walk out the door; treat them with respect, understand their needs and help develop their skills. Employees are not a cost to the organization; they are critical, valuable assets that will ultimately increase profits and help companies move to the next level.
Here are some practical guidelines to consider when designing a retention strategy.
- Retention starts at the top and management needs to be accountable for employee retention. Employees leave a manager more often than they leave the company. Train your leaders on how to manage people, how to provide feedback and how to develop their staff.
- Differentiate your company and know what you offer is unique to the competition. Share your company vision and strategic plans.
- Retention begins with hiring. Make sure you know who you’re looking for and have a thorough job description. Develop interview questions that will help you find the right person for both the position and the company.
- Develop and conduct an effective orientation program. A new employee’s first initial days within an organization are some of the most crucial days of their career and will impact their performance going forward.
- Give employees the responsibility and authority to get things done while continuously challenging them.
- Provide an atmosphere of encouragement, feedback and appreciation. Create a management style that listens, shows interest and supports new ideas of employees.
- Develop solid training programs.
- Be aware of what your culture is like; strive for team work, respect, accountability and enjoyment.
- Obtain employee feedback on a regular basis through one-on-one or round-table discussions, exit interviews and/or employee surveys.
- Pay attention to compensation and benefits.
This might seem like a lot of hand holding when you are trying to run a business, but paying special attention to human intangibles is the ultimate solution to turnover and retaining those key individuals that will help drive profits.
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