Businesses are still reeling from The Great Resignation, and it doesn’t appear that trend will be putting on the brakes in 2023. Research by Robert Half Talent Solutions shows that 46% of respondents are looking for a new job or plan to during the first six months of the year.
By 2030, the U.S. is on track to lose $430 billion annually due to employee turnover.
These startling numbers should get the attention of more company leaders and HR executives across the nation and spur them to action. At some point, businesses that are losing valuable people and struggling to replace them with equal or better talents are going to have to get on top of the turnover problem before it turns their business upside down.
Retaining workers begins with company leaders listening to them and building relationships, providing real growth opportunities and rewards for their best producers, and holding themselves accountable as much as they do their employees.
Building Relationships
You’ve heard the old saying that when most people quit their job, they’re really quitting their boss, right? With people leaving jobs in droves, it’s past time that many owners and leaders look in the mirror – not to admire themselves and way of doing things, but to look objectively and honestly at how they treat their employees and how they could improve in that key area of leadership.
We talk a lot about investing in technology to move our companies forward. But first what drives companies is people – their talents, their work ethic and ingenuity, their growth in the job. Therefore, it’s absolutely crucial how we as leaders invest in the people who work for us – not just in salary, bonuses and benefits, but in our day-to-day dealings with them. You and your career as a business leader and/or owner will be formed and defined by your relationships, especially with your employees. And it’s critical how you approach building them.
One of the biggest reasons good employees stick around is having leaders who take the time to mentor them as well as learn about their family and life outside of work. That personal touch truly makes a difference in how employees view their bosses and their workplace.
Overall, consistent communication from leadership is hugely important in terms of having happy, productive employees and driving their loyalty to the company. Employees need to be in the know to feel connected and to do their jobs well. Managers should connect regularly with employees to address obstacles – including giving them the tools they need to perform their jobs better.
That starts with the onboarding process. Key parts of the employee launch at a company and getting them off to a good start include the leader setting expectations and facilitating proper training. Again, the leader’s willingness to cultivate a relationship with the employee is crucial, building a bridge of trust and support in the early stages when the employee isn’t completely comfortable in their new role. I think it is really good as a manager to start with a simple and friendly conversation. No “sit at a desk” kind of conversation, but one in an open and comfortable environment. Ask about them. Tell them about you. Then move into discussions about the job and the company.
I usually end these types of conversations with an upbeat and unifying statement: “I will always be transparent and would ask the same of you. I have to know if you are not getting what you need to be successful at this position. Now let’s go to work!”
Incentivizing and Rewarding Employees and Managers
In terms of financially investing in and incentivizing your employees and managers, I’m a huge fan of profit-sharing incentives for top employees/management.If the company does well, I do well, and the other key people should also. In certain business formats (i.e., LLC), you can even provide an equity model to employees that is highly attractive. The key employee has equity and a vesting period but loses the ownership interest if they leave before the vesting period or are terminated for cause.
Other carrots you can dangle to have a better chance of retaining your best people:
- Flexibility. This has become a big factor during The Great Resignation. Working from home (I never would have thought in the past that remote work would be the norm) and the four-day work week are huge incentives to keep employees on board. It does create management dilemmas, but we as leaders must now adapt.
Showing another kind of flexibility also is hugely important these days: Organizations that are competitive in attracting and retaining employees give their talented people a lot of autonomy. Avoid micromanaging; it will push employees away. Measure results, not necessarily hours or effort.
- Recognition. It’s so important to provide recognition where it’s due. An employee who feels appreciated and valued is more likely to stay. But if an employee goes above and beyond and doesn’t get recognized for it, they may get demoralized and lack motivation to keep up the hard work. That’s a step toward “quietly quitting” and heading to the door.
- Career growth. Show your people you truly care about their future and their importance to your company by outlining opportunities for growth and development. If employees feel stagnant in their role, they will get restless and eventually walk. Give them a clear path to advancement. Be a mentor for them or designate another leader to be their mentor.
Holding Yourself Accountable
How can leaders better hold themselves accountable? This is a simple one to me. If my turnover rate is higher than the current norm, then I’m not doing something right and I need to figure that out.
One of my companies had turnover issues recently and I couldn’t understand why. So, I started talking to the employees, and finally one opened up about their immediate supervisor. I had missed something, so I tried to mentor and “fix” this person.
I set expectations, held them accountable, and when the objectives were not achieved, I terminated the person.
As a result, employee turnover significantly decreased. At the end of the day, I don’t really blame the person that I terminated. It is my responsibility to mentor and monitor the leadership team. I missed it, but I fixed it.
Remember: When your top performers leave, their valuable company knowledge is lost; the remaining workforce can become disillusioned and burn out; and the cost to frequently replace employees mounts financially and culturally within the company. But if a person likes their job, has a career path at the company and a boss who treats them with the utmost respect, that constitutes an excellent work environment and a solid chance for that company to keep that key employee.
James Harold Webb (www.jamesharoldwebb.com), author of Redneck Resilience: A Country Boy’s Journey To Prosperity, is an investor, philanthropist and successful multi-business owner. Webb began his entrepreneurial journey in the health industry as the owner of several companies focused on outpatient medical imaging, pain management and laboratory services. Following successful exits from those companies, Webb shifted his focus to the franchise world and developed, owned and oversaw the management of 33 Orangetheory Fitness® gyms, which he sold in 2019. Not one to stop, he currently has two additional franchise companies in various stages of growth.