For stable business, satisfied customers, and annual savings, the key is to reduce employee turnover.
Every business owner wants a long list of happy customers. But what some might not realize is that satisfied customers begin with satisfied employees.
That’s not great news for the commercial cleaning industry, where the average turnover rate is 200%, which essentially boils down to hiring an entire workforce twice per year. And with hiring comes recruiting and training, all of which costs more than what it would take to implement measures designed to reduce employee turnover. Besides the cost-savings, reduced turnover also keeps your business running smoothly and builds stronger relationships with your clients.
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Reasons for leaving
To understand how to reduce employee turnover, it’s important to first understand what causes it in the first place. In general, the number one cause of turnover stems from compensation practices; workers feel as though they aren’t paid enough for the work that they do. This is a valid concern to address, but there are other equally important catalysts of employee turnover that may be even simpler to derail once identified.
“Employees want to feel that they are appreciated and valued,” says John Kerlish, SPHR, of Human Resources Management Associates, Inc. “They’ll stay if they’re getting satisfaction, recognition, and reward.”
The formula to reduce employee turnover seems simple, then: Value your people, and they will value you. But what does that look like? What are some things you can do to show your employees that they matter to you as much as your customers?
5 Ways to keep customers happy by keeping employees happy
1. The compensation battle
Compensation will always be a hot topic for business leaders looking to reduce employee turnover. Employees, no matter the level, always want more, and executives, for the sake of the business, typically want to give less.
The solution to the stand-off is rooted in mutual respect and accountability. Finance and human resources departments should conduct annual (or even semi-annual) benchmarking of industry salaries. Don’t pay employees less just because you think they’ll accept less. (You get what you pay for!)
Offer wages and salaries that are on the high end of industry norms, and explain your rationale to your staff. This demonstrates that you’ve done your homework and that you want to pay people what they’re worth.
2. Creative benefits
Introducing creative benefits packages and programs is another great way to reduce employee turnover. Subsidize as much of the health insurance premiums as you can. Implement a flexible time off policy. Provide daycare for employees with young children, or a dependent care flexible spending account. Offer paid parental leave and short-term disability.
People like perks. The more you can offer, the more likely an employee is to stay. (And if you’re concerned about the cost, just remember that it costs 50-150% of an entry- or mid-level employee’s annual salary to replace them. With a 200% turnover rate, the cost of added benefits is suddenly not so daunting.)
3. Provide training
In today’s workplace, training and career development are essential for those looking to reduce employee turnover. People no longer work just for the paycheck. They work to feel a sense of accomplishment and purpose. With that comes a natural desire to advance. If you offer training to your employees, they will feel valued, and that will improve their loyalty when other job offers come knocking.
4. Company outings
Part of feeling valued is feeling connected. Spending time together outside of the office builds the cohesion required to reduce employee turnover. Hold a monthly office happy hour at a local establishment, take a day for a summer outing, or even designate a charity day to strengthen the relationships between you and your staff—which translates into a sense of belonging and dedication to one another.
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5. Respect and compassion
Treating people with respect and compassion may be the best way to reduce employee turnover—and it costs little to nothing.
When someone has an issue with child care, accommodate as much as you can without implied repercussions. Empower employees to feel comfortable calling out sick when they’re ill. Get to know a little about them and their personal circumstances.
There will always be the proverbial bad apples who abuse compassion, but the truth is that most people who receive compassion will respond with dedication. If you are willing to support your employees through their personal circumstances, they will usually respond by working harder for you—in essence, supporting you through your business.
Bonus tip: Hierarchy has nothing to do with it
Too often, we get caught up in the hierarchy of who is in what position, but everyone has personal circumstances that affect their work. For years, traditional work culture dictated that you leave your personal stuff at home, but that dynamic is changing. Business has always been about relationships with customers, but smart business owners are beginning to realize that the same philosophy applied to employees makes for even greater success.
No matter where an employee stands on the company ladder, everyone wants to be respected and supported. This alone can reduce employee turnover rates to manageable levels, and if you’re doing it properly, you’ll see it trickle down into everything from the benefits you offer to the ways your employees work with one another.