As a business owner, you probably know by now that training new employees is expensive. While it is a necessary cost of doing business and unavoidable at times, you want to do everything in your power to keep good employees. Doing this allows you to reduce the amount of time spent training new employees, so you can focus your efforts on growing your business instead.
That is, of course, unless you’re training new employees because your business is growing and you need additional help, which is a good thing for your business. Otherwise employee turnover can cost your business more than you realize. In fact, CBS News MoneyWatch reports that it costs businesses 20 percent of an employee’s annual salary to replace that employee if he or she earned $50,000 per year or less. Some studies cite that number as even higher.
Cisco cites turnover as the worst problem in the retail industry. Considering that the turnover rate for retail businesses is somewhere in the neighborhood of 67 percent, you might be inclined to agree. Retail has a notoriously high turnover rate, but there are things you can do that will help you improve employee retention for your small business, like those listed below.
Not only is it critical for the sake of your business to train your employees well, but it is also essential for employee satisfaction. Employees don’t like to feel out of their element once they are left on their own to do the job. They need to feel confident that they can do the tasks they’ve been appointed. Otherwise they will constantly fear for their jobs and keep an eye out for the next job to come along.
While it is always good to have an effective training plan when employees walk in the door – to help get them started – it is equally important to offer them training that will help them advance in their careers and in your organization. This makes employees feel like you’re investing in them and their future with you. That instills a sense of loyalty from your employees and encourages them to think about remaining where they are rather than moving on to other businesses and jobs.
Promote from Within
Employees never want to feel like they’re in dead end jobs. Show your employees that you’re willing to promote from within by doing just that. Give them increasing responsibilities and the benefit of new titles along the way. It makes them feel invested in helping you grow your business, increases job satisfaction, and provides them with a sense of pride for a job well done.
If you think you can’t afford to offer promotions and raises periodically, remember the figure above about how much it costs to replace employees – especially in industries, like retail and hospitality, that have notoriously high turnover rates. Those costs add up quickly and could be avoided with periodic promotions and raises for stellar employees. In other words, a small promotion and corresponding pay raise can save your business big by helping you retain quality employees who will have added motivation to help your business grow.
Set Clear Expectations
Along with training, helping employees feel more confident in their abilities to do the job right, setting clear expectations also goes a long way toward improving employee retention and reducing high turnover rates – even in industries that typically struggle with retaining quality employees.
While it is great to have a thorough handbook that explains procedures and expectations, it is also critical to set a good example by showing employees, every day, what is expected of them. You should also consider offering consistent scheduling, too.
This lets employees know what to expect related to days off work, hours worked, etc. You can even use your Clover Station POS system to help you with your scheduling needs by using apps that will even send email and text message alerts to employees notifying them of their schedules.
Create a Fun Company Culture
There is not enough that can be said about the value of creating a company culture of fun in your small business. It doesn’t have to cost a lot of money either. You can implement things like free movie night where you bring in a movie, sodas, and popcorn for a fun experience at work after-hours. Do this once a month and encourage employees to invite one guest to enjoy the movie on you.
Have contests with fun prizes and bragging rights for winners, and acknowledge employee accomplishments with small tokens of appreciation. These are all fun, motivating, and encouraging for employees. Those things translate to happier employees who are better engaged in your business.
Remember that not all the costs associated with high employee turnover are direct costs (training and salary). There are also indirect costs of poor employee retention as well, those are costs related to things like recruiting, advertising, interviewing, and paying other employees overtime to cover shifts.