The days when U.S. businesses had an inexhaustible supply of workers are gone, replaced by an environment in which companies compete as fiercely for employees as they do for customers. One way to deal with a tight labor market is to avoid it. "If you can retain employees, you don't have to replace them," says Dale Hageman, president of Accord Human Resources Inc., an employee leasing firm in Oklahoma City. A successful employee retention program can reduce the effort you put into finding, screening, hiring and training new workers. Here are some tips for reducing turnover:
- Make it a long-term commitment. Your entire organization must understand and reinforce the need for employee retention; mere lip service or a one-shot campaign won't work.
- Hire the right people. Take time during the hiring process to make wise decisions. Be candid about working conditions, responsibilities, opportunities and other details to reduce your chances of making hiring mistakes. And avoid candidates with a history of frequent job changes.
- Offer a competitive salary and benefits package. Hageman separates benefits into two tiers: traditional, such as insurance, retirement plans, paid vacations and holidays; and extras, such as negotiating for discounts with nearby child-care providers or health clubs, or asking your bank to waive service charges for employees' personal accounts. Come up with ways to help your employees save money and streamline their lives.
- Provide an economic stake in the company. Consider profit sharing, or at least give bonuses when the company does well.
- Be flexible with work schedules. Unless there is a sound reason for rigid schedules (such as a retail store that must open on time or an assembly line where one worker's production is dependent on another's), give individuals some control over their work hours. "As long as they get their job done, exactly what time they're in the office may not be critical," Hageman points out. "Consider flex time, telecommuting and other ways of creative scheduling."
- Communicate. Let employees know what's happening with the company. "Communicate your vision for the company and the importance the employees play in helping fulfill that," Hageman says. And make communication a two-way street: Listen to what your employees have to say.
- Encourage creativity and innovation. Create an atmosphere where employees feel comfortable making suggestions and trying out new ideas.
- Build a sense of camaraderie. Provide opportunities for employees to bond with one another. Hageman suggests a combination of activities such as planned social events (company parties or picnics) and impromptu happenings (a surprise pizza lunch or taking off early on a Friday afternoon).
- Reward individual and group performance. Recognize achievements with memos, mentions in staff meetings or articles in the company newsletter. Small, tangible rewards are also a good idea. "Hand out a $20 bill to someone who did a good job," Hageman advises. "You can do other small things--provide movie tickets or gift certificates to a restaurant--that don't cost much but have a tremendously positive impact on your people."
- Invest in training. Training improves customer service and strengthens employee loyalty.
- Remember that your employees have lives outside the company. It's not realistic to expect employees to leave their individual problems at home. "You have to recognize that employees have personal lives that come with personal problems," says Hageman. Those employees are still very valuable, and sometimes you need to make accommodations for the impact that their personal lives are going to have on the office."
Employee retention takes time and effort. But, says Hageman, it's something you must do. Because if you don't, "you're going to lose your quality employees to a company that does."