It is no secret that high employee turnover is costly for any business. Staff turnover costs British businesses at least £4.13bn every year, the Oxford Economics revealed.
The same report shows that on average it costs more than £30k to the business to replace an employee and it will take on average more than 28 weeks for a new member of staff to get properly up to speed. An article in the Huffington Post reported on the hidden costs, such as on the morale of remaining staff and a less effective service. If you take on millennial workers, the risk of staff turnover increases. Gallup reported 71 per cent of those born between 1980 and 1996 are either not engaged or actively disengaged at work.
Even when staff stick around, unless they are fully engaged, it will affect the bottom line. In contrast, engaged employees are committed to doing a good job and will ‘go the extra mile’ when needed. It is vital to identify, develop and retain those who are strongly aligned to your values.
As one business owner once told me: “I can teach skills, I can impart knowledge, I can train and develop my people – but I can’t teach values; they’re either with me or they’re not.”
It is important to hire someone who fits the company’s values. It involves curiosity about a person, rather than a tick-box assessment. Instead, try the three TED questions – ‘Tell me…’, ‘Explain to me…’, ‘Describe to me…’ – to really get under the skin of what makes them tick.
Asking questions about how they have approached and dealt with certain situations in the past will help determine if they in line with the company’s values and help predict future performance.
Building engagement in your business
Once you have found the right people, you then need to retain them. This is not just about ‘performance management,’ but rather ‘potential management’. Contrary to popular belief, traditional rewards such as money (alone) are not always effective drivers.
Staff satisfaction and high performance are linked to personal growth and development. Daniel H. Pink in his book, Drive, goes on to say the majority of us are engaged and energised by three fundamental needs:
Autonomy—the freedom to direct our lives;
Mastery—our craving to excel;
Purpose—the yearning for our work to serve something larger than ourselves.
Yet too many businesses simply look at compensation as a means of retaining and ‘engaging’ their top talent. Pay does matter and if you get it wrong it can be a massive de-motivator. But engagement rests in meeting people’s needs for a strong sense of belonging and purpose, as well as encouraging personal growth and development.
Research continually shows that a person’s direct relationship with their manager or supervisor is key to their engagement. Indeed, one survey by Gallup showed that one in two had left their job to get away from their manager to improve their overall life at some point in their career.
So what can you do as a business owner or leader to change this?
Here are a few tips:
1. Involve your teams more – people hate having stuff ‘done’ to them. Involve them in the future direction of the business and listen to their ideas. Show them that their opinions count.
2. Communicate goals – clearly set out the objectives and priorities of the business and regularly update on how the company is performing against these goals.
3. Align roles – ensure everyone has clearly defined roles and responsibilities and spend time discussing how they can directly improve the overall performance of the business through their activities.
4. Feedback and recognition – such as spontaneous ‘thank yous’ when things go well and celebrating in business successes. Regularly sit down one to one with your team to look at what’s going well, where they are having challenges and how you can support them.
5. Play to strengths – identify an individual’s strengths and provide opportunities for them to use these more within the business. This could involve supporting colleagues or getting involved in projects outside of their normal day to day role.
6. Show you care – talk to your people about their own personal development. Where do they see themselves going? How can the business support them?
Reap the rewards.
An engaged team is an asset few companies can afford to neglect. Invest in your people and you will be rewarded with a more productive and loyal workforce.
According to Gallup, an engaged organisation enjoys an overwhelming host of benefits. This includes: fewer sick days, higher employee retention, higher profits, higher productivity, fewer job-related accidents, fewer quality errors, better customer service and higher customer loyalty.
We help business owners to get an honest assessment from their team, benchmark their employee engagement and take targeted action based on real insights. For more information, visit www.businessdoctors.co.uk/avon-and-somerset or call 0845 219 7077