How to Retain Your Staff Better than Other Small Businesses
How to Retain Your Staff Better than Other Small Businesses
Let’s talk about Retention.
If you know me or have heard me speak, you know how passionate I am about how retention in small business can drastically change your bottom line. I talk to a lot of Business Owners and CEOs about retention, and the overwhelming theme is that HR is “soft”, “touchy feely”, or the “only department that does not have to reach a goal or quota.”
I am a Mathematical Economics major. You are probably asking how I got into HR, and that is a fair question. However, that means I love data. So we are going to go over some statistics that disprove that HR “does not affect your bottom line as a small business.”
The stats:
3.7% Unemployment Rate (this is staying for the moment)
47% of Active U.S. employees are “watching or actively looking for new opportunities”
Replacing exiting workers costs .5x - 2x the employee's annual salary. Assuming an average salary of $50,000 that replacement cost translates to between $25,000 and $100,000 per employee.
Obviously, your small business is probably perfect and no one will ever leave your organization. However, 47% is a huge percentage of employees who are looking to leave for a new job and actually admitted to it on a survey. If you combine that with the cost outlined above you will hopefully realize that HR and retention dramatically affect the bottom line of your small business.
Want more stats? Here you go:
- In 2021-2022, a majority of workers who quit their job were asked and they said these were the top factors:
63% - Low Pay
63% - No Opportunities for Advancement
57% - Felt Disrespected at Work
Before you roll your eyes, think for a second about this. Maybe you cannot match the offer that Google just gave your EA. However, there are things that may be considered “touchy feely” or “soft” that can affect your bottom line. And did I forget to mention… a lot of this is free!
So here are the areas of Retention that we are going to focus on the next couple of weeks:
Competitive Salary
Career Path for Employees
Health Benefits, 401k, and PTO
Flexible Hours
Flexible Work Location (some 4-day workweek talk as well)
Unique Benefits No One Else is Offering
Leadership Development or Mentoring Programs
Great Looking Work Environment
That’s the start! Can’t wait to hear your thoughts in the coming week.
In the meantime, here is our Small Business HR Quiz. See where you are at and where you may need some help:
How to Create Great Culture Through Onboarding
How to Create Great Culture Through Onboarding
Today, we are going to focus on creating culture by facilitating relationships during the onboarding process – a very important piece of the onboarding puzzle!
Here's a recap from my last newsletter on Onboarding to jog your memory:
91% of new hires will determine if they want to start/stay based on how they are onboarded.
The boss is the best person to onboard.
You need a PLAN ahead of their start date.
There are many elements to great onboarding – we will focus on them over the next weeks.
ONBOARDING PRINCIPLE #1 - CREATE GREAT RELATIONSHIPS
To ensure that your new employee is set up for success, you must start by facilitating great relationships.
On the first day, you should say something like, “While we want you to get to your work soon, you will see that we have put quite a few meetings, lunches and coffees on your calendar. We feel that this is crucial for you to spend time with the people that will be important in your work relationships.”
Then, you as their manager will set up all these meetings prior to their first day and those events should be on their calendar when they arrive. Don’t leave it up to them to schedule the meeting.
Communicate to the people they will be meeting with that these are critical and you expect them to follow through and meet. Do not let more urgent things get in the way.
Efforts like this create Culture because relationships are crucial. Here are some relationships that I believe need to be fostered:
Peers – Create lunches and coffees and meetings in the first 4 weeks for all peers (in their own department and across departments – like Finance, HR, etc). The new employee can do these meetings in groups or one on ones.
Manager/People Leader – You (as the boss) should have the first meeting with them on the first day – no exceptions. If you are taking vacation that week – do not have them start. It is important for you to take at least 15 minutes/day in your schedule to meet with the new employee (for the first 2 weeks) and see how they are doing in their onboarding. Then, create meetings every Friday for 30 minutes for the first 60 days. Have them set and do not miss them!
Customers – If they are customer facing, creating lunches/opportunities to have one of your team go with them to meet the customer (or zoom is necessary). Make sure when the person introduces them to your best customers, that they praise the new person and tell them how excited they are to be taking over.
Other high-level employees in your company – If there are others that are executives that they will be working with, make meetings with you and the other executive and the new employee. It is important for the high-level execs to meet WITH them and not just walking by their desk.
I’m pretty sure that very few small businesses do this.
And even fewer do this well. It’s FREE. And impactful. You’ll be surprised how well it goes and how your overall employee engagement improves as well!
As always – if you need some help to put together a great onboarding plan – call us! We have quite a bit of experience in this area and can help your team create a memorable few months for your new hires.
Here are the ways to get in touch with us:
Email me at cfiler@innovative-outsourcing.com
Go to our website: https://www.innovative-outsourcing.com/
Follow Innovative Outsourcing
How Onboarding Well Can Improve Retention
How Onboarding Well Can Improve Retention
When I ask a client about their onboarding of new employees, they often tell me about their new hire payroll documents. And then I say to them, "What about the other onboarding activities?"
And I get a blank stare...
Just to refresh this statistic from my blog on Pre-boarding:
“Even after accepting a position, 91% are willing to quit within the first month and 93% during the probation period if the job doesn’t match their expectations.” - survey from Robert Half
With that said, let’s take a look at some of my favorite strategies around onboarding new employees:
Your New Goals for Onboarding:
1. Get your new employees super excited - one CEO of a large corporation we created onboarding for said, “I want to make the new hire run through the wall for our company”. They need to be fired up when finished with onboarding.
2. Help your new employees understand the general employment policies and expectations - This should also be company wide, but they need to know the information.
3. Make them feel like they made the correct decision in taking this job - Sounds like it is not your job, but it is.
4. Tell your company story - You want new employees to get behind the mission, values, and history of your small business.
5. Help them to create great relationships - Introduce them to people around the office. Set up lunches for them with different people that will be useful to know.
6. Help them to learn necessary skills - This is the basics, but set them up well to learn the role
7. Help them to know where to go for help and information - If they have questions about anything, they should know the best people to answer them.
Keep in mind the following statistic:
“A strong onboarding process improve new hire retention by 82 percent and productivity by over 70 percent.”
With these new "Onboarding Goals" in mind – think to yourself.
Is this a strength of our company?
When new employees are done onboarding, are they so aligned and ready to go that they hit the ground running with excited anticipation?
If not, let’s get to work. Two pieces of advice:
#1 – The importance of setting aside the time to do onboarding well.
The boss needs to participate and understand the importance of setting aside precious time in the first 2 weeks to do this well. We find that this is a real problem. If a boss doesn’t understand this critical need to onboard well, they just throw them in the job quickly to get work done. They are undermining future productivity without giving onboarding adequate time and attention.
#2 – The boss is the best person to onboard
The boss acts as a quarterback to determine what all is needed and to set up meetings and programs either with HR or alone if no HR exists to make sure all the objectives are met.
We will delve into more onboarding best practices next time!
Here are some links to our website and podcast. If you are a small business with recruiting or HR needs, please reach out to me at cfiler@innovative-outsourcing.com
How to Lead Teams in Economic Uncertainty
HR Strategy: Leading Teams in Economic Uncertainty
I am hearing from our clients daily about the state of the economy, and the uncertainty in the market. CEOs see some of the signs of 2008, but do not know how to prepare if a recession is looming.
Although I do not have the expertise to talk about cash flow management, I can talk about what you can do with your team from a leadership perspective. During the pandemic, I told our clients that decisions they made with their employees then will affect what happens the next two years. I will say the same about right now. Here are 4 ways you can lead your team during these uncertain times (or a 3-minute video if you prefer):
1. Communicate Often - This is when you should communicate more than normal as the CEO or business leader. If everything is fine at your company, let your team know that you are not going out of business. If you need to tighten budgets, tell them that. Do not let them hear through the grapevine what is going on at the company. Be direct, share KPIs, and let them hear from you often.
2. Ensure Job Security - If you are not planning on layoffs, tell your staff that as soon as possible. That looming threat often causes people to look elsewhere if they feel there is a threat to their role. Just telling your people that layoffs aren’t on the table (if that is true), will reassure people, and will encourage productivity without the thought of layoffs looming.
3. Show Empathy - The news is very negative out there. I actually recommend just acknowledging that. Tell your team that you know the news is rough and the markets are concerning. Understanding the concerns they might have will be oddly assuring.
4. Be Large and In Charge - Employees want to see their CEO be a leader worth following. People want a leader that has a vision and a plan, and who is not easily rattled by what is coming. They want to feel secure and know that their CEO is in control of the ship. We, as leaders, do not always have all the answers. However, when we are in front of our team, it is time to be confident and lead.
Strategies to Consider:
1. It is a great time to hire - If you are a company that sees no signs of slowing down, now might be one of the absolute best times to find great talent that we have seen in years. The clients we have worked with in the last month are seeing exceptional candidates!
2. Start the preparation for the worst - If you must, figure out a plan with your leadership team around what positions might need to be eliminated if a downturn turns worse. We learned in 2008 that you don’t want to wait on these decisions too long. Have a list of possible jobs that could be eliminated first (and the lowest performers listed), which could be a huge help if we get to that point.
Two Ways We Can Help:
1. There are always HR questions that come up when things are shaky - so please don’t hesitate to call me (30 minutes is always free). Email me to set up a time!
2. For the first time in two years, we are having a hiring sale. We are lowering our recruiting fees for the month of April to help small business that might need help during these times. Now’s a good time to get a deal with our fees! Email us if you are interested.
Sales Pitch of the Day:
The HR Audit is a tool designed for small businesses in any industry to identify the strengths and weaknesses of their HR function.
We evaluate the 14 areas of HR from compliance to retention. We develop an HR strategy to make your employees proud of where they work. Watch the video to the right for more information or visit our HR Audit Page on our website.
HR Strategy: The 3 Employee Lists
HR Strategy of the Week: The 3 Employee Lists
Just to preface: I get the opportunity to speak to CEOs, COOs, and Managers all the time about their people because of my HR background. I talk about compensation, benefits, and other important HR issues. However, every time I include "The 3 Employee Lists" in one of my talks, it gets everyone thinking and talking. If you really think through these 3 Lists, I think you can dramatically change your organization. So think through these when it comes to your organization:
List A - The "OH NO! What Happened?" Group: This is what you say when you get a resignation letter from one of your vital team members. If someone is on this list, and they resign, you immediately leave the office and think about closing the company (not really, but kind of). These people embody the values, culture and “spirit” of your company. They “Get it”. They could be the admin or the COO - but they mean a ton to you. When you read this, your mind will go to the people who are so important in you business!
List C - The "WOO HOO Finally" Group: This is what you say when you get a resignation letter from someone on this list. In a kind way... you are very excited. You wanted to let them go and now they are doing it for you. They might be unproductive, or they might produce a lot, but have a terrible attitude that doesn’t work in your company. Everyone in the business talks about how they just don’t fit or they have to work extra to make up for their deficits.
List B - The "Adequate Work for Adequate Pay" Group: This is where most of the people in your organization should live. These people show up to work on time, do quality work, and you pay them fairly for their work. You do not expect them to wow you, but they are good employees. Again, this is where most of the people in your organization live!
Do Something about List A and List C!
For the people you have on your "List C", you have two options:
Develop - invest time and energy into training them to become better in whatever they lack if you think it can be corrected.
Let them go! - this sounds harsh, but these people negatively affect the business or firm. If you choose to keep them on, it will set a terrible example for the rest of your staff
For the people you have on your "List A", you have one option:
Create Individual Retention Plans - Be students of your people and find out anything you can do to make them stay! Have conversations with them often. Make them a priority and spend time making sure they are happy! Might seem like a waste of time, but shame on us if they hand us a resignation letter and we did not do everything possible to keep them!
If you want more detail, here is myself and Matt Filer talking through it on our podcast: HR Ins and Outs for Small Business Podcast
Sales Pitch of the Day:
The HR Audit is a tool designed for small businesses in any industry to identify the strengths and weaknesses of their HR function.
We evaluate the 14 areas of HR from compliance to retention. We develop an HR strategy to make your employees proud of where they work. Watch the video to the right for more information or visit our HR Audit Page on our website.
Unpopular Opinion: Why Right Now is the Best Time to Hire
Unpopular Opinion: Why Right Now is the Best Time to Hire
You might not be thinking this, but right now is a great season to hire. Have you heard the phrase: "Buy when no one else is buying"? You might hear this in the stock market or real estate world, but it is also a good hiring mantra.
Here are 5 reasons why you should be hiring right now:
1. This Economy: Many companies might be freezing hiring or spooked about the layoffs at big tech companies and what that means to the economy. The savvy small business CEO is going to know that this is a rare opportunity to pick up "A+ Players" for their organization. If you start to hire now, your candidate pool will be larger than when the markets start to go back up (which we all know it will). If your company had a great year or this small recession is not affecting you, we recommend hiring now!
2. Concern About Current Employer: Many employees are getting concerned about the profitability of their current organization. If you are stable and growing, you will be able to attract candidates that may not have been looking for a new role before now.
3. Less Competition for Talent: Less employers hiring generally means more favorable outcomes in quality and salary (something that was far from the case in 2022). In a time when hiring is slowing across the country, it is easier to find "A+ Players" that are willing to make a move. If you wait until conditions improve, you may have missed this unique opportunity that your competition is not taking advantage of.
4. The Right Time of the Year: On the candidate side, employees have time off around this time of the year. This means they are on their computers taking time to look for something new. Statistics show that when employees have down time, they often spend it wishing and searching for new situations. On the employer side, less companies start recruiting at the holidays because they want to “hire at the beginning of the fiscal year”. In January, the market will be flooded with work and your job will just be one of many when it could stick out now.
5. Put Employees on Innovative Outsourcing's Payroll: We can put your employees on our payroll. This is a no-risk approach to hiring. For both part-time and full-time positions, we can keep W-2 employees on our payroll for as long as you like.
Provide Training and Development
"47 percent of people actively looking for new positions say company culture is the main reason" -- Hays.com
Does this make you wonder if you might have some work to do around your office?
A couple of weeks ago, we started a series about simple strategies to improve your work culture. I’m going to share some of my experiences with the companies who are finding success in creating a great culture.
#1 – Providing Feedback
If you missed it, check out the link HERE
#2 – Providing a Flexible Work Environment
If you missed it, check out the link HERE
#3 – Provide “Better-Than-Market” Total Compensation
If you missed it, check out the link HERE
#4 – Provide Training and Development
“The only thing worse than training your employees and having them leave, is NOT training them and having them stay.” –Henry Ford
Employing a team of well-trained employees is crucial to the success of businesses, regardless of size. Large corporations often budget substantial dollars for this expense. But what about you as a small business owner without comparable financial resources to devote to training and development?
Good News! The inability to match the training budget of a larger company does NOT mean you don’t have any good options for developing a culture of learning. With a bit of resourcefulness and innovation, implementing cost effective training solutions is not as daunting a task as you may imagine.
You may be thinking, “I hear you, but my plate is already full juggling all that’s required to keep my business running efficiently. Is it REALLY important for me to devote time and resources to this?”
The answer – “YES! It is important!" Here are a few reasons why:
Employees want to feel that you are INVESTING in them – We know that employees who feel that their employer is helping them develop will tend to stay at that company longer. Employees who receive ongoing opportunities for development perceive that as a show of commitment and loyalty from the employer – so then they tend to commit longer and be “all in” as well.
Happier, more engaged staff – Happy employees create more positive experiences for customers, which impacts client retention, repeat business, and the bottom line.
Lower Turnover – An engaged work force that feels well trained and sees themselves as co-partners in the company’s success is more likely to stay long term, thus minimizing employee turnover and its associated costs.
Increased Productivity – Even resourceful employees willing to figure things out on their own perform less efficiently absent proper training. Employees with a strong grounding in the skills and knowledge essential to their job performance, execute more efficiently which can measurably increase productivity.
Uniformity and Consistency – If one of your aims is for customers to enjoy a uniform experience regardless of which employee services their needs, good training is an effective tool to ensure that all employees are on the same page.
Now that you know WHY training is important, let’s look at HOW it can be economically implemented.
Learn, then Teach – If your budget doesn’t accommodate the cost of having your entire team receive professional training on a topic, a prudent cost saving option is designating one effective communicator to learn a new skill or technique and then train their peers with the newly acquired knowledge.
Online Training – There are online training resources to address a variety of business learning needs ranging from the highly technical to soft skills. Options run the gamut from brief online tutorials to full blown video courses.
Links to a few good options are found below:
Leadership development and self awareness from Giant Worldwide
Industry Associations - As part of their member benefits, many trade groups and professional associations offer training and certification options via seminars, webinars, and online courses. The Society for Human Resources Management (SHRM) and the Project Management Institute are two of many examples. If there’s an association applicable to your industry, it could be an invaluable resource in this regard
Lunch and Learn Sessions – Coordinating “one-to-many” training over lunch is an excellent way to concurrently build team cohesion and train on a relevant work topic. It’s also an opportunity to share industry news or raise awareness about trends that impact the business.
As these examples illustrate, a workable, cost-effective employee training solution is readily attainable, regardless of an organization’s size.
Take some time this month to determine what training is needed for your different team members – even if you are swamped. Then ask one of your staff to investigate possible options and sources for those needs. I might even be able to help with some of your management or “soft skills” concerns. I lead sessions on Myers Briggs 16 Personalities, which is a tool that can help your employees better understand each other and work together more effectively. I have also done sessions on conflict resolution and conducting effective performance reviews. Whatever your staff’s needs, there are affordable options out there that could make a world of difference to your team.