Employee retention doesn't happen by itself. It requires a proactive strategy from the business owner and management team.
One of the most enjoyable aspects of my job as a payroll services provider is that I have the opportunity to talk with small business owners on a near-daily basis. It usually doesn't take long for the conversation to turn toward human resource issues, and the topic of retaining talented employees always comes up.
If you've followed my columns in the past, you know I've opined that turnover isn't necessarily a bad thing. A number of you wrote to me that you disagreed. You said that losing skilled employees hurts, especially when they play a central role in the life of a small company. I agree. But the thing that hurts more than losing talented workers is the knowledge that the business owners themselves may have held the power to retain them. Although employees sometime leave for reasons that are completely beyond management's control, you would be surprised to learn how often the real reason for turnover is because the employee didn't feel valued by the company.
Sobering, isn't it? But fortunately your ability to retain quality workers isn't necessarily dependent on your ability to be the highest bidder. There are several non-financial incentives that can be systematically utilized to communicate value and cement your relationship with your staff. For those of you who want tips on how to retain top talent, here are a few things that work well for me at SurePayroll.
By far, the single most important factor in retaining talented workers is personal attention. Everyone likes to be noticed, but it is particularly important for employees to know that their efforts have garnered the attention of the company's owner and upper management.
The alternative -- relative obscurity -- leaves the employee feeling as though their work is being taken for granted and when that happens there is a high probability they are headed out the door. Even though you don't have time to give every employee the personal attention they desire, it pays to make time for the ones your business can't live without.
You might not realize it, but your employees have certain expectations about their present and future roles in the company. Many times, these expectations are based on nothing more than the personal ambitions of the employee himself. Let's say Harry is a top-performer in sales. However, you don't see any qualities in him that indicate management ability. Yet when Harry is passed over for the district sales manager opening, he suddenly turns in his resignation because his expectations were different than yours.
A simple conversation about expectations in the context of an annual performance review could have clarified the situation and avoided the disappointment that ultimately caused him to look for work somewhere else.
Once you've managed an employee's expectations, it is imperative to develop shared goals with them. A discussion of the company's goals is good, but it's more important to help the employee see his role in achieving those goals. Similarly, the employee needs to understand how his role will grow as the business grows.
In Harry's case, it might come out that what he really wanted was more responsibility and a larger role in the company. Since sales is his strong suit, perhaps his role could be expanded to include mentoring or training younger sales staff. He's happy because his role in the company has expanded and you're happy because less experienced sales personnel are learning from someone who is highly successful at selling your product.
Finally, it's critical to support your employees' goals by giving them the tools they need to achieve them. In recent years, job coaching has surfaced as a valuable tool in this area. Coaches aren't mentors. In fact, their expertise may be in an entirely different field. Instead, the coach's role is to support and encourage the employee as they struggle to reach their goals.
If you have already worked with the employee to develop shared goals, a coaching relationship emphatically communicates that you are not just paying lip service, but are genuinely interested in helping your employees succeed. There's no guarantee they will get that kind of commitment from another employer, so the incentive to stay on board is high.
Remember, the golden rule in employee retention is to think about what motivates you to continue working for your company and make a concerted effort to provide the same things for the people you employ. You won't eliminate the loss of talented employees entirely, but you will significantly reduce turnover and your business will be better because of it.
Last updated: Jan 8, 2008
MICHAEL ALTER is president of SurePayroll, America’s leading online payroll service. He received an MBA from the Harvard Business School and holds a bachelor's degree in economics from Northwestern University. @michaelalter