How to Improve Employee Retention: Keeping in Touch
One reason CEOs of small businesses must remain vigilant against high turnover is that it impacts them more than their counterparts at larger companies. Argote notes that, "smaller companies are hurt by employee departures more [than larger companies] usually because a lot of their knowledge hasn't been formalized or embedded in processes and routines." But where small businesses fall down when it comes to institutional memory, they have a distinct advantage of giving employees greater access to the boss.
Murphy recommends holding monthly check-ins with every employee to see what is motivating them and demotivating them. This can give a CEO foresight into potential morale problems much sooner than he or she would ordinarily catch them. "Instead of getting two weeks notice when somebody is quitting, if you're doing these conversations regularly, you should get a minimum of four months notice if you've got a real problem with an employee, and that's just light-years better," he says.
While Hoffman doesn't meet with every employee individually, he conducts frequent all hands meetings to give employees a role in setting company goals and to stay in touch with what their needs are. Still, especially as your company grows, details of the employee experience will escape your attention, which is what the exit interview is for. It's the last line of defense against a bolting employee and it can sometimes yield surprising insights and reveal fixable problems.
For example, when Hoffman's head of accounting quit, everything was going amicably. She gave plenty of advance notice, she helped train her replacement, it was only at the exit interview that Hoffman realized why she was leaving. It had nothing to do with the company, she had simply grown tired of accounting and needed a new challenge. That was all it took and two months later, the employee returned to the company in a different department and she is now its head buyer.
Dig Deeper: Strategy for Measuring Morale
How to Improve Employee Retention: Don't Burn Bridges
Though the adage that you join a company but quit a manager holds a lot of truth, as showcased by the above example, employees don't always leave because of a personal dissatisfaction with their boss or their company. But at a small company, it can easily feel like a personal slight when an employee leaves you in the lurch. Still, it's important to remain on good terms.
A lot of small businesses "make the mistake of doing the whole 'you're dead to me' thing when an employee leaves," Murphy observes, "if you part with people in a friendly way, you've probably got a new customer and a friend out in the industry."
Dig Deeper: What Should You Say When an Employee Quits
How to Improve Employee Retention: Leave Some Room for Error
Whenever you task an employee with a project, you want them to succeed right? Murphy poses the counterintuitive suggestion that if you only give assignments where success is assured, you're hurting yourself in the long run. If your employee is "not going to have to learn anything, probably the assignment you gave wasn't robust enough," he says. Pushing people out of their comfort zones and allowing them to develop new skills is also a key strategy for retaining your best employees.
And no job is too simple or mundane for a boss to give employees room to innovate. While employees might be suspicious at first if they've never been presented with such decision making power before, they will often not just adapt to, but thrive in, an environment that gives them additional control.
Murphy cites the example of a group of garbage men making the rounds in a planned community. Once their supervisor encouraged them to improve upon the existing methods for collecting garbage, one employee discovered a way to cut the route in half, saving both time and fuel costs. By carrying an empty can with him on his route, he only had to make one trip between the truck and each house instead of two.
Dig Deeper: Giving Employees a Say
Resources
- Leadership IQ is a Washington D.C. based firm that conducts research on leadership strategies and provides executive education courses on topics such as workforce issues and executive performance.
- Organization Science is a bi-monthly scholarly peer-reviewed publication covering a range of field including organization theory, strategic management, and communication theory.
