Not all attrition is bad. Planned attrition is desirable for the growth of your business.
I know of a small scale businessman, who after losing a few trained hands
did the most desperate thing. He limited his employees’ access to training and product information to make them unattractive to poachers.
He effectively stalled the growth of his own, flourishing company.
Planned attrition could in fact be desirable for the growth of your business. That is why smart organizations don’t act in haste when they begin to lose trained employees to rivals. They respond by devising innovative retention solutions, unique to their business needs. This post is about these unique, retention strategies.
According to Manpower Inc., a leading, HR Services firm, the global best practice is to measure retention, the cost and causes of unplanned attrition. A small business owner should ask herself: “Why are people leaving me?” And, more importantly, “What can I achieve in terms of customer satisfaction and profits with a 10 percent improvement in retention”?
The analysis can be very revealing. By a conservative estimate however, the cost of replacing a trained employee can be roughly 0.41 times his/her salary. (Source: Conference Board, a Washington, DC-based workplace think-tank.) This does not include the opportunity lost, so imagine the colossal waste when a talented worker decides to make an unplanned exit!
Talent is the fuel that drives a small business
When Nobel Prize-winning economist Gary S. Becker coined the term “human capital” things were vastly different. Today, people drive business. They are the assets and market capitalization of a company. And when they leave your company in the evening, the value of your business is zero. Attracting and retaining talent is one of the most vital functions of an organization today.
Share information; be open
Employees need information to perform. Very often, the difference between a star performer and the not-so-star is just information. This additional information could be could be your plans, vision, minor and incremental updates, and it could be of no consequence in the immediate term but could prepare the employee for a greater role in the organization. An unfettered access to knowledge tools ensures that everyone can claim an equal share in the success of your business.
Salary is just a hygiene factor – not a motivator
If you ask what motivates employees, it’s not what comes to their bank account at the end of the month. It’s about what they do every moment and their view of what their work life will be going forward. For most people, it’s not about salary. Unless, salary is lower than their expectations.
Often, good working environment, work culture, learning and development, is rated as a top retention tool. People are also attracted to freedom to choose projects they want to work on, job rotation etc.
Refine your hiring process
Try to fix the problem where it starts. You have to get in the right people in order to keep them there. Identify the gaps in your recruitment process and begin to plug them systematically. If you bring in a misfit, the person will leave eventually. If you bring in the right person (role-wise, aspirations-wise, compensation-wise, culture-wise) the person stays and wants to excel. If not, it’s just a matter of time.
Let candidates experience your workplace
A good strategy, could be to let prospects “experience the role” by visiting your workplace and interacting with current employees, before they are asked to make a decision about accepting the offer. In my experience
this can sometimes stem attrition by almost 50%!
Assess your manpower needs clearly, so you don’t hire in a hurry, or oversell the job to someone who is unable to eventually meet your skill needs.
Listen to your employees; don’t underestimate the value of an exit interview
When an employee comes back to you with a problem, listen patiently. They could be wrong. You could be right. But listen to them. And listen to them often. Take feedback often. Ask them if they are enjoying their work, if something is hindering their performance, what else you could do to help them perform better.
Never commit the mistake of not asking feedback. If you don’t they think you don’t bother about them. If you ask, it tells them that you value them and their opinion.
If the employee does leave, take an exit interview. The feedback gathered, in a relaxed, non-judgmental climate can be extremely helpful in addressing core attrition issues.
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