Early last year, a client came to me with difficulty retaining talent, a high turnover rate, and overall a feeling of employee disengagement. They were not using tools to measure or collect data about engagement. Based on both intuition, turnover numbers, and an HR Audit (including interviews with employees) we had enough touchpoints to develop a strong understanding that the workforce was disengaged. Anytime a workforce is disengaged business leaders should be worried about employee retention and its opposite, employee turnover.

The cost of turnover

It might be important to note that turnover has enormous ripple effects on a business. It takes time to recruit new team members, train new hires, and get them to their most productive state. A business that has high turnover is almost never fully effective because they have too many team members who are not working at complete capacity. The toll turnover takes on existing staff can be suffocating in terms of the workload. 

You can quickly understand this if you imagine a restaurant; consider the plight of a micro restaurant that has a server, cook, and a dishwasher. What if their turnover rate is 33% and their dishwasher has quit. That leaves the cook and server to manage the entire restaurant until a new dishwasher can be hired and properly onboarded to full productivity. The cook and server might be able to manage this for a short time period however, it will take a toll, cause them to work more during their shift, not be as focused on their customers and they might even drop the ball more often. This results in long wait times, orders that are inaccurate, unhappy customers, and exhausted, overworked employees. This example translates to other businesses too but the chaos may not be as obvious to leaders or clients.

The national average for turnover in 2019 according to Salary.com was 19.3% across all industries. That means that 80.7% of the workforce remains in place over the period of time that is measured; a month, a quarter, a year. The opposite of turnover is retention, ideally, a business would have a retention rate of 80.7% or better (some turnover is healthy). If it’s lower than 80.7% it can cause issues with productivity and overall well-being of the workforce. Also, understand that turnover can vary by industry and it might be helpful to understand the turnover rate in your particular industry. 

Why is it important to measure turnover and retention?

If your small business is experiencing heavy workloads, unsatisfied employees, perhaps a lack of engagement, a good place to start is to examine your turnover and retention rates. Conversely, if things are going really well at your business it might be that your workforce is fully productive and your retention rate is excellent. A positive retention rate is an attractive number to share with potential new hires, investors, and business collaborators. This will give you the data to help understand the dynamics of your workforce as opposed to going off of intuition or a hunch. A good best practice for small businesses is to track this quarterly and annually. 

Taking action to overcome problems with your small business employee turnover

Last year my client implemented an employee engagement tool that measured both eNPS (employee net promoter score) and employee engagement. Having new knowledge of live data (it was a weekly tool) helped this business understand their areas of opportunity and slowly, over the next 12 months, they were able to deliberately make decisions, implement new tools, policies, and a mindset of employee value and development, that has changed their workforce. Employee retention is up by 34.3%, employee engagement has consistently shown improvement and is currently up by 10%, and the eNPS has improved by 46 points all in a 12 month period.  

“Employee retention improved by 34.3%, employee engagement improved by 10%, and the eNPS improved by 46 points. Employee engagement tools are a great resource to help impact employee retention for small businesses.”

The eNPS score has been the last target we have tried to impact and largely this is just getting started. However, by changing many of the other behaviors and tools it has had an impact on eNPS.

These improvements are not by accident or good fortune. Using tools to understand your workforce can help provide information and data so that you know exactly where to invest. In this situation, a combination of an HR Audit, utilizing an employee engagement tool*, and effective leadership had a profound change on the retention rate and overall employee engagement.

If retention and workforce uncertainty keep you up at night, let’s fix that. Contact Amy.

* Examples include; TinyPulse, Officevibe, 15Five, CultureAmp to give you a few examples. McGeachy Consulting has no affiliation with any of these companies.

Amy McGeachy, PHR, SHRM-CP

HR Consultant to small and medium sized businesses in Oregon and Washington.

Amy McGeachy is an HR Consultant and the Founder of The Exceptional Workplace, a newsletter to help small business leaders stay focus on proactive HR and People Practices. Never miss an issue - join HERE.

The absolute joy and relief of having your HR practices planned, tidied up, and rolled out to your workplace is indescribable. Really. Clients who operate without an HR Plan, without an employee handbook or workplace policies, and without a culture manifesto report relief once these things are in place. 

For many small and medium businesses, the only way to ensure that you remain committed to your HR capabilities and people practices is to have an HR Plan. There is no right time in the lifecycle of your company to bolster your HR Capabilities. If you feel like you're too late to this game don't fret. Now is the time, the HR Plan will give you a fresh start at developing your HR practices and investing in the people-side of your business. This plan can be as simple, or complex, as you want to make it. For your ease, we have created a sample for you to use as a baseline.
 

Where to start?

Start with the most significant, most impactful items for your workplace. What drives your culture? Start there. What programs have you committed to and what new people practices do you want to implement? Then look at compliance and fit those items into your HR Plan as well (HR Audit, employee handbook development or update, non-harassment or non-discrimination training, etc.).
 

Besides what’s in the model, are their other items that small businesses often fit into their HR Plan? Yes, I’m glad you asked!
 

Here is a list of a variety of items you might consider:

• All employee retreat

• All employee meeting

• Leadership team meeting or retreat

• Quarterly reviews

• Off-site employee team builder

• Create a culture manifesto

• Employee engagement survey (annual or pulse survey)

• Monthly manager brown bag lunch (with or without a learning topic)

• Plan for special events (Employee Appreciation Day, Take Your Child to Work Day, Bosses Day)

• HR audit

• Employee handbook creation/review

• Revisit HR policies that impact the workplace culture. For example the ability to recruit top talent (vacation policy, workplace flexibility policy).

When you're ready to benefit from developing your small business HR Plan click here and we will send you a sample HR Planning Calendar.

Most small businesses have to select what’s most important to their workplace from the list above. Pick what’s right for yours, review it with your leadership team, and commit to the plan.

Gain the peace of mind for your small business with a plan to maximize your HR Capabilities and people practices.

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Life can be hectic, let’s not be plagued by the preparation for Employee Appreciation Day, which will be here in a few short weeks, March 2nd, 2018. Let’s brainstorm some options to help you show big appreciation to your team.

And, if you’re hesitating STOP.

This is about creating culture, helping employees develop a love for your company, giving your team members a reason to tell others about their delightful workplace (hello, instagramable workplace). This is not about you giving more. It’s about you caring about your team.

EMPLOYEE APPRECIATION DAY IDEAS --->

It's not how much we give, but how much love we put into giving.

Mother Teresa

SERVICE:

The idea of taking care of those people who are in service to you is such a lovely act of kindness. This, aside from all other acts, can go a long, LONG way. Why not flip things upside down for a bit and serve your team members?

How about a waffle bar with the CEO as the main server? Another spin on this is a nacho bar or a car wash.

SURPRISE + DELIGHT:

Some employees will be overjoyed with a little bit of surprise on this day of appreciation. Take for example a conference room that is filled with balloons, each with a sharpie-written note of appreciation for individual team members, “Charlotte your customer service skills are exquisite. We are lucky to have you!” What fun it is to find your balloon and read your note. Order lunch in and give them a coupon for an hour (or more) of flexibility in their workday in the coming month and you’re all set.

Have a whiteboard in your office? Cover the whiteboard in notes of appreciation for your team. Big, bright words telling them how grateful you are that they are part of your team. The bigger, the more of an impression it will make. Add a dessert buffet to the conference table and a small gift. Well done.

PRACTICAL:

Looking to add to your office perks to attract and retain talent? This is a great day to reveal the additions to your team.

• Extra holidays - World at Work says that the average business observes 9 paid holidays per year

• Enriched PTO Plan - Average PTO plans start at 16 days per year for new employees

• Add a 401k if you don’t already have one

• Implement a flexible workplace policy

Offer this along with donuts and coffee in the morning and a handwritten note from the team leader and you have a solid employee appreciation day.

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This might seem like one of those posts you can pass by — because c’mon, of course you know your workforce. If your business is small enough, then chances are you were the one who hired them!But actually, studies show that there’s often a huge disconnect between the management and the workforce of an organization. And if you’re not connected with your workforce, it’s only a matter of time before you start having serious problems.

The good news is that you can avoid so many issues with just a little bit more knowledge about your people. So if you’re starting to wonder if maybe you don’t know your workforce as well as you thought you did, ask yourself, do you know:

The #1 Gripe Going Around the Office

If you do nothing else after reading this post, I’d really encourage you to find out the #1 thing that’s bugging people in your workplace. It might be an easy fix that you’ve never even thought of simply because of your position in the company — by knowing what it is and addressing it, you’ll show people that you’re actively invested in making work better for them, which will go a long way to inspire loyalty and improve productivity.

As an example, a client in Portland recently upgraded their workplace coffee, water, and snack program to the absolute delight of their employees. Perrier sends a message of class, high-end, and engagement while tap water might send the message of unremarkable, ho-hum and unimportant. Every workgroup is different so it’s important to ask, and ask more than once.   

Even if it’s something that you can’t fix right away, you can at least let your team members know that you hear them and the lines of communication are open, which goes a long way towards easing tensions. Besides, there’s a good chance that this issue is related to the second most important thing to know about your workforce:

Why People Leave

You probably have some sort of idea of your turnover rate already — and if you don’t, you need to get on that ASAP. But it’s not enough to know that people are leaving. You need to know why people leave, and especially why your best people leave, otherwise you could be needlessly hemorrhaging talent and knowledge capital. Is it more money, better career opportunity, workplace culture, are they burnt out?

How do you figure this out? By asking and observing. Make it a point to include questions about this sort of thing in every exit interview, and make it clear that you really do want to know to improve, not to harp on people or defend the company. If you are afraid that employees will not be honest with you to the extent that you need have an HR Consultant or another key leader in your company conduct the Exit Interview. In the digital age, exit interviews can even be conducted electronically.

Why People Stay

Similarly, you need to know why people stay in your workforce, both the things that keep the great employees and the things that keep the not-so-great ones. That way, you can keep doing those things that encourage the people you want to stay, and stop doing the things that encourage the underperformers.

The best way to find out why people stay is to conduct Stay Interviews. Here are some great Stay Interview questions taken from the book, Hello Stay Interview, Goodbye Talent Loss.

• What about your job makes you jump out of bed in the morning?

• What makes you hit the snooze button?

• If you won the lottery and resigned what would you miss the most?

• What can I do to keep you?

• What would entice you away?

Have you ever heard an underperformer say that they like your company because they are on easy street while a top performer likes your company because of the rigor? This insight is valuable. The solution here is to balance the rigor with the goal of losing underperformers and attracting and retaining top performers. Hint; 1:1 meetings and mid-year reviews are a great way to balance the rigor keeping tabs on each team member's performance.

The Ambitions of Your Key People

You may already get a sense of this as you’re finding out why people leave and stay, but make sure you really get a good sense of the ambitions of your key people. This allows you to support them in achieving those ambitions (which is a very important part of leadership, and one of the top intangible things employees want from companies). This alone may keep you from getting caught off guard by one of your key people leaving to pursue an ambition you knew nothing about. You may even be able to keep them if you can find a way to support that ambition while still having them work for you!

An example of this is when a client of mine found that their right-hand gal had aspirations of working in the medical field in an auxiliary role. My client pursued clients in that industry, which satisfied the curiosity of her employee. Small businesses have a way of being nimble to meet these needs. Don’t be afraid to ask.

Something Personal About the People You Work With

So you already know that people are not widgets or computers … but it can be hard to remember that when you’re head down in paperwork, schedules, and payroll. The truth is, most employees work to live, so make it a point to find out what they’re living for outside of work, and ask them about it! It doesn’t have to be a big production; something as simple as “Claire, how was your hike to Mt. St. Helen’s?” works just fine.

Doing this keeps you connected with the pulse of the workplace and makes people feel well cared for and not just as one more number on the payroll, both of which are characteristics of an exceptional leader. (Not to mention being crucial for a happy, productive workforce.)

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