It doesn't matter what sector your company is in; without the right employees, you can’t be successful. And even if you have them, you cannot control whether they end up leaving your organization when you need them the most. Some of them may remain at your organization for as long as you provide the right incentives, and others may make their decision based on the company culture. Either way, one thing is for sure - employee turnover is an expense that can be avoided when the correct approach is applied.
It's essential to understand the need for a balance when it comes to your employees. While employee churn can be a massive problem for a company, over-compensation doesn't make up for a "bad workplace," either. Here are some tips for HR managers to retain their best employees rather than risk them pursuing other job opportunities.
Above Average Pay for Above Average Productivity
Everyone wants to be paid fair rates for their work, whether we are speaking about a journalist or a handyman. One obvious way for a company to retain its best employees is to pay an above-average industry rate to ensure that their workers are productive and satisfied. For example, if you are a CEO - you might consider a "standard rate" for employees in your industry - and then decide to pay them, for example, 20% above that rate to ensure that they stay.
It isn't uncommon for employees to eventually feel underpaid, no matter what the industry, and there are many situations where employee loyalty is actually exploited. If an employee is simultaneously underappreciated and underpaid, it's easy to see how this can lead to high employee turnover. However, if your rates are above the standard, then you can avoid a lot of headaches and keep a lot of your best employees around. If you are a company that always pledges to pay fairly, this can help tremendously in terms of overall employee retention.
They Don’t Quit Their Jobs; They Quit Their Boss
Plenty of people leave their jobs for a simple reason: because they cannot stand their boss. This might not be an instant process, either. Employees, over time, might feel as though their boss demands too much of them, doesn’t appreciate them or listen to feedback, or have other concerns about executive leadership. Either way, one surefire way to make sure that your employees hate you is to micromanage them into a corner.
The entire point of delegation is to help to manage an organization’s overall workload. Logically, work should be delegated to employees who are trusted and productive. However, if their work is continuously impeded, questioned, or doubted - the productivity of your entire company is affected. Employees should be able to ask questions about the job but should be left alone to be as productive as possible. Some of the best leaders understand that giving a certain amount of autonomy to employees can be a wise decision that leads to profit and growth.
You might want to keep every employee on board, but the truth is that cutting costs is a reality of doing business. Of course, layoffs aren’t the only reason to let go of an employee. For example, you might realize that the worker is toxic, adding to workplace negativity, or simply isn’t as productive as you had hoped.
There are HR professionals that need to realize that sometimes employees don’t fit within a particular company, and if you continue to employ those who don’t value their work, it might send a message to other employees that the organization truly doesn’t take itself seriously, or that work ethic isn’t valued the way it should be. An effective way of retaining great employees is to get rid of the ones that are holding the company back.
There are plenty of successful companies that can be consistently profitable every quarter, and yet, they aren’t really innovating. Many companies are profitable in the short-term and lack long-term creative approaches to gain more market share. It’s not uncommon for HR professionals to take a “bottom line” approach to their organization, but creativity can go a long way. Even for immensely successful companies such as Pepsico, the wrong advertisement strategy - which could be due to a lack of creativity - can be detrimental.
Your employees might have fresh ideas and perspectives that are waiting to be heard, but they cannot be implemented unless you encourage them. You might consider an informal meeting where employees can brainstorm or offer unique solutions to some of the problems that your company is facing. Many executives might think giving employees some time to be creative is a waste, but just one innovative idea could lead to a marketing approach and a revenue stream that elevates the company to a whole new level. Encouraging employee input also gives them an added sense of purpose within your organization, which has been demonstrated to make people happier at work without having to pay them more.Back to Small Business blogs
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