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A happy staff is a healthy business: Print 21 magazine

Wednesday, 26 March 2008
By Print 21 Online Article

Retaining good staff is one of the most critical areas for maintaining a successful business – and it’s only going to get harder. Peter Barnet outlines four key strategies to help keep your staff happy and your business healthy.

Is this how recruitment runs in your company? You run an advertisement and then interview someone for a position in your company. Depending on how well they sell themselves to you, you either have them back for a second interview and subsequent job offer, or politely conclude the interview process. Once the person is on board, you expect many years of good service.

Well, unfortunately the landscape of recruitment and employee retention is changing radically. So much so that it would be fair to say that you can expect the opposite, especially when you are interviewing the younger generations, such as Gen Y (those born 1980 – 1995). Expect them to interview you and don’t expect them to invest many years into your business; they won’t stay unless their needs are met.

If recruitment is only going to get harder what are you doing to address the needs of the staff you have? What do you assume about the level of job satisfaction of your current employees? Do you assume they are all happy with what they are doing when they arrive every day? Remember the danger of assuming is that it makes an ass out of u and me! Finally, what are you doing currently to retain your good employees?

This is a critically important issue in business and will continue to be for the next 15 years at least. Why?

Here are some current statistics that should get you acting fast:
* Unemployment is at a current 32 year low as at May 2007.
* Studies show that employee-initiated turnover is costing employers up to three times the annual salary each time an employee resigns.
* A 2006 study showed that 80 percent of employers felt their employees would stay for more than two years whilst 60 percent of employees felt they would leave their current employer in less than two years to further their career.
* 7 out of 10 employees that leave an organisation do so because of their boss, not the organisation.
* A June 2007 survey showed that current annual employee turnover for the manufacturing industry was 11 percent and the business/services industry was 15 percent.
* HSC school leavers in 2007 face the best job prospects in over 40 years.

But here is the killer….

* In the decade beginning 2020, only 125,000 new employees will enter the work force.

What all this is saying is that it is a candidates market. It also says that moving on from a job if things don’t work out is very likely and that the shortage of candidates actually makes it easy to do so. This shortage will continue past 2020 because Australians have not had enough babies who will grow up and be able to enter the workforce. This situation will continue for some time and is a major issue for the Federal Government to address. So we best leave it to them and focus on what you are going to do in your business to ensure that you retain your best staff, before you have to recruit more.

Four steps to happiness
Here are four things that you can do that are critical to retaining good people in your business:

Have a performance management system that works. Too often companies do not have this in place or the one they have is too confusing. There are many different options but the one you choose should be simple and be based on strategic performance objectives. Also your employees should have the opportunity, and be encouraged, to move within the company based on their skills, interests and performance. This helps build a culture in your business that ensures performance and skills are rewarded. If your staff can see this behaviour gets rewarded they are more likely to perform and be satisfied.

Keep employees informed. Silence from the top is the greatest enemy of retention. You need to hold regular briefings or meetings for all staff to let them know the strategic goals of the business and how the company is tracking against them. It also an opportunity to highlight staff achievement to reinforce that their success is recognised.

Continue to educate employees. Education and personal development are the cheapest retention tools you can have. Remember that the majority of staff turnover is simply employees looking for a bigger challenge or the opportunity to use new skills. One of the goals of your performance management system should be to highlight areas for employee development and then develop a framework to ensure it actually happens.

Help every employee build a social network. One of the strongest attachments employees have to their organisation is to fellow employees. One way to encourage and promote this is to develop social networks and special interest groups. Your employees spend many hours at work and, much like the experience in sporting teams, they are more likely to put in and gain satisfaction from work if they actually like the people they work with. They do not need to be best friends but just by forming a connection and a network with their workmates they can feel more satisfied and likely to stay with the group.

Once you have addressed these fundamental building blocks of employee retention in your business you can then start to explore more financial incentives for your key staff or all staff but for advice on that I suggest you talk to your accountant!

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