According to the U.S. Bureau of Labor Statistics the average yearly turnover in all industries is close to 32 percent. Every industry is different in their turnover rates. The fast-food industry as an example can have as high as 50 to 75 percent rate of turnover. This means if you started the year with 50 employees, by the end of it you would need to replace 25 of those employees because they left.
High turnover is usually caused by the employee being dissatisfied with the job, low pay, not a friendly environment to work in, long hours, not feeling appreciated. Every employee is different. Some are motivated by money, some by having a flexible schedule, others by the type of work they do.
While zero percent would be an ideal turnover rate for any business, the reality is it’s very hard to achieve because every employee’s circumstances are different. What’s important to one employee might not be to another, and the challenge happens when you’re a small business or just starting out where money is tight. You could be a janitorial company or a landscape business who pays their employees the minimum wage, and although it would be nice to pay your employees higher wages, the reality is most of the time your budget will not allow it. And to add to that, when your competitors are offering the same salary, what makes your employees want to stay with you? Given the same benefits as what’s out there in your field of business, what gives you the edge over the competition?
When we started our business, ezClocker, and hired our first intern, we paid her more than her previous non-tech minimum wage job paid. However in comparison to other startups, we didn’t pay her more than what other software companies out there offer. We didn’t have great perks or a sleek office or any of that stuff you hear on the news, but what we did do is give her work that she was responsible for. She was an equal contributor to the team with a flexible schedule. In the end her engagement scores were high and she told us she loved working at the company. Nothing we did cost us any extra money, it was simply treating your employees right and trying to figure out what motivates them. If you’re not sure what will make your employees happy, just flat out ask them. Ask them questions such as, “give me examples of what would motivate you at work?”.
Here are some ways to improve employee engagement that is either free or inexpensive:
Flexible Schedule: I have a friend who told me once that one of the main reasons she is not leaving her job (her skills are in demand and she can find another job easily), is her current boss allows her to work from 6 a.m. to 3 p.m. in a traditional 8 a.m. to 5 p.m. environment so she can pickup her kids from school and be with them. It wasn’t the pay or the type of work, it was the flexible schedule she had that made all the difference. This also didn’t cost the employer anything because she was putting the same number of hours in as a regular schedule. So offer a flexible schedule that will work around your employee’s life and passions.
Management: Employees want to feel they are heard and appreciated. Have regular monthly meetings with your employees to give them feedback, talk about the status of the business, and get input on how to improve the company. Make sure you follow up and have action items because if employees are asked for feedback and they see no action, they will not trust you and stop giving you valuable input. If you get a compliment from a customer about the work your employees have done, share that and reward them for it. Just because you are a small business does not mean you can’t operate like a professional business. You can start by having systems and processes in place so employees are not confused on what to do and they can easily know what is expected from them. If you put a sign out on your door saying customers are our number one priority then make sure you reward your employees when customers are happy with the service. Make them feel they have an impact on the company and it’s brand.
Treat them like Family: Being a small business has its advantages and one of them is the business can feel like an extended family. Unlike big corporations where employees are just a number, you can make your business different by giving it that personal touch. One of my first jobs I had was at a company where the owner sold the business to a bigger corporation, but he made sure not one person would be laid off for one year and offered a bonus. Although he was selling his company he made sure that his people were taken care of and I could see the loyalty employees had towards this owner. They wanted to work for him again if he ever opened another business, which he eventually did, but that loyalty where your employees will follow you anywhere you go needs to be earned by you taking care of them and showing that you care.
Offer unique benefits: The most popular benefits folks look for are the traditional health and retirement benefits, but if your budget will not allow it then come up with unique benefits that make you different. If you employee Millennials offer them one year of free Spotify premium membership or host a bring your dog to work day on Wednesdays. If you have a slow week like the holidays give them half the day off and pay them for the whole day. These perks might not apply to your business, but the idea is to think of small unique benefits that do not cost much while making the work environment more friendly and create happy employees.
Let’s face it, without your employees you have no business. So make sure you keep great talent when you find it and take care of them. They will give your company the competitive advantage you need to succeed.
Author: Raya Khashab
Raya is the CEO and co-founder of ezClocker. She is passionate about customers and building products that change the way people run their business. She is also a big supporter of the startup community and helping people achieve their dreams.