Retaining Top Employees Should Be Your #1 Priority

Linda LaitalaBusiness, EmployeesLeave a Comment

One of the most frustrating aspects of owning a business is having valuable team members quit.  Good employees are worth their weight in gold, especially in today’s market where there is strong demand to fill key roles in high growth companies.  Not only is it challenging to find a new employee who meshes with your company culture, a recent SHRM (Society for Human Resource Management) study predicted that it costs six to nine months’ salary on average to replace a salaried employee.   Here are some suggestions on how to prevent this from happening in your company.

Make employee retention part of your strategic plan
Recognition, flexible work arrangements, a commitment to work life balance, employee engagement, health and safety, communication, workplace diversity, formal wellness programs, inclusion and opportunities for employee development are some tactics that can ensure retention.
Pay market or above as soon as you can afford it for mission critical positions
Be realistic about compensation.  In today’s market, good people may be tempted to leave for higher salary and perhaps a signing bonus as well. Once they give their notice, you can’t counter – it’s too late.  A raise won’t keep them at this point.
When you hire a key employee, it’s good practice to do a salary comparison on similar positions.  I’m always surprised at how few companies do.  They rely on past history, casual conversations between CEOs’ and gut feel.  Paying market rate is a sign you respect a person’s experience, talent and ability.
Find a growth path for everyone, especially the great ones
Several years ago I toured an organization called Focus: HOPE in Detroit, Michigan.  Every employee from the mail clerks to vice presidents had a formal three year plan that outlined internal and external training, examples of how they would use the training in the organization and exposure to other departments.  The employee I spoke to was on his third three year plan and couldn’t stop talking about how wonderful his employer was.
Talk to your people – get real feedback
Formal, annual reviews aren’t enough to combat turnover in a tight labor market.  Meeting quietly, one-on-one, at least once a quarter with your best people is an excellent course of action.  Ask if they have frustrations in their job.   Do they have ideas that would benefit the company?  Do they feel stalled?    Do they see themselves on a growth plan?  You have to ask.  Be patient.  Be friendly, but be candid.  You need to learn what they know and how they feel.  It takes time to draw out information.

It’s tempting to stick to business and ignore the human side of the most important asset in any company, the people.  However, losing a valued employee can result in costly damage and may even have a snowball effect within the ranks.
Next week: More retention strategies that work.

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