Replacing key employees is expensive. You may be able to quantify the sales lost when an associate leaves to work for a competitor, but those lost sales may be just a fraction of the financial loss. Have you also considered the time and expense of recruiting, hiring, and training a replacement? Even more difficult to quantify may be the effect that a key employee’s departure has on the remaining team. Other associates may also begin to question their commitment to your company, and they may now have a new connection at your top competitor! Aggregating all of these potential costs, it becomes very evident that retaining your key employees may save your company considerable time and money, even after potential costs of retention are taken into account.
The initial response of business owners faced with the loss of a key employee is often to focus on money, promising raises, bonuses, or higher commissions to keep the valued associate, but that may be a mistake. Each employee has different priorities that are key to their retention. An associate’s priority certainly may be compensation, but it may also be flexible scheduling, healthcare benefits, fulfilling work, or the camaraderie of the team. Use your annual review time with your associates wisely by finding out what the key motivators are to each.
Gallup has conducted studies on retention and their research suggests that financial compensation plays a minor role in driving employee engagement. In fact, 70% of associate engagement is influenced by the associate’s direct leaders. That is encouraging news for the manager whose key associates are being actively recruited. The work environment that you create, not the promises of your competitor, contribute most to the retention of your team.
If you aren’t sure if you are providing an environment that encourages retention in your workplace, the answer may be in the questions you ask of yourself and your associates. Since the owner or leader is the key to retention, ask yourself:
• How am I perceived by my employees?
• Do I create an environment in which employees know what is expected of them and why they matter?
• If I am asking respect from others, am I showing them respect as well?
To gauge your employees’ enthusiasm for their jobs and the workplace you have provided, you may want to include a “Stay Interview” in your performance review. Ask your team members:
» What do you like most and least about working here?
» What can we do to improve your job or work environment?
» What are your career goals?
» What is your dream job?
The most important thing any business owner or leader can do to retain key talent, though, is to be genuinely engaged with his or her staff.
When you ask them how they are, listen to and, when necessary, act on the answer. Let them know their ideas and feedback are important to you. Ask repeatedly. An associate may not have a ready response the first time, but when they come to understand that you will be gauging their satisfaction regularly, they will begin to contemplate the questions throughout the year and arrive to future meetings armed with insightful responses.
Engaging with your associates requires thought, intention, and a commitment of time. This two-way engagement eventually transcends the periodic review process and becomes the way things are done throughout the year. The payoff comes in the form of a team that is more empowered and committed to their leader and their company. As any recruiter can tell you, it’s much harder to lure happy employees away from a job and a manager that they love.
» Mark Blackwell is a Certified Wealth Strategist® and the Mississippi Area Executive for Regions Private Wealth Management. He can be reached at firstname.lastname@example.org.