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
Best Practices When Making an Offer to a Candidate
Best Practices When Making an Offer to a Candidate
Don’t make a mistake now! You are so close to a YES!
Making an offer often seems like a formality to many companies. They have done all the hard lifting and found a great candidate. Historically, a short phone call telling them an offer is coming by email has worked because “the candidate is so lucky to get a job offer from our company! Of course they will take it!”
However, the world has changed. The way you offer is critically important not only to you getting the candidate you want, but to ensure a great beginning to their work days with you.
Call the candidate with excitement!
The hiring manager (or CEO if appropriate) needs to call the candidate with excitement! This is the moment that the candidate has been waiting for, and it's important to create a positive and enthusiastic experience for them. By conveying your excitement and interest in the candidate, you are more likely to create a positive impression and increase the likelihood of acceptance.
Say something like this:
“Emily, we are so excited to offer you the position of senior accountant. We have looked at over 130 resumes and interviewed many candidates for this position. We spent days figuring out exactly what we needed in this job, and then we found you. We believe that you will be not only exactly what we were looking for skill wise - but your attitude and energy are just what will make you a great fit. We will follow up today with an offer in writing but we really hope you will say yes!”
Put an offer in writing that same day
The offer should come on the same day and preferably within an hour of the phone call (not before the phone call - that is not recommended at all!). This provides the candidate with the necessary details regarding the offer, such as salary, benefits, start date, and other relevant information. This also shows the candidate that you are organized, professional, and value their time.
Meet or exceed their salary expectations
Don't offer less than they thought was coming. If you have discussed salary expectations with the candidate or posted a range, it's important to ensure that the offer meets or exceeds their expectations. Offering less than what they anticipated can create a negative impression and may cause the candidate to reconsider their interest in the position. Even if they take the job at the lesser rate, you have communicated to them that they weren’t even good enough for the lower end of the range and you will be starting off poorly. If you don’t give them the highest end of the range, you will need to explain why they aren’t good enough for that, and again this may not sit well with them. It’s better to make them excited with the salary - this is not the economy for a salary negotiation. Candidates don’t want to engage like that anymore. So give them a fair, expected salary.
Keep communicating!
If there is much time between offer acceptance and start, continue to communicate with the candidate. This can include sending them a company t-shirt, newsletter, or welcome emails from staff. This helps to keep the candidate engaged and excited about the opportunity to work with your organization and may squash any other offers that may be coming in behind yours. Surprise and delight them with gifts, communication, excitement from current team members, etc. It doesn’t cost much - but is important if there is more than a couple of weeks prior to their start date.
In summary, these 4 simple actions can make a HUGE difference in the result. As you look back at your last hire - is there any improvement you need to make? It sounds like FLUFF and unimportant - but the result of not doing these things might mean starting the recruiting process all over again when your candidate starts with another company. Let’s not let that happen.
As always, we would love to talk to you about your hiring process. We coach our clients through every step when we work with them in recruiting. It’s just part of what we do and why our clients like to work with us! Our survey scores are 5 out of 5 on the client and candidate side. We know that sounds like bragging, and it is. Hiring and HR is what we do best!
Unusual Benefits a Small Business Can Offer to Improve Retention
Unusual Benefits a Small Business Can Offer to Improve Retention
Hiring and Employee Retention are two of the most important aspects of running a successful small business. One of the keys to hiring and retaining top talent is by offering benefits and incentives that go beyond just the typical salary and healthcare packages offered by many small businesses. Here are six examples that we have seen clients of Innovative Outsourcing us to keep employees happy, engaged, and loyal.
1. $100/month to Gym Membership
Offering a monthly stipend for a gym membership is a great way to promote health and wellness among your employees. This benefit not only shows that you care about your employees’ well-being but also encourages a healthy lifestyle.
2. Mental Health Care
Providing access to mental health care resources can be an important retention lever, especially in a world where mental health is increasingly important. Offering employees that the employer will pay for the first three visits for example. Or providing them resources like a mental health help line. This will help ensure that your people are taking care of their mental health, which in turn can lead to increased productivity and engagement at work.
3. Financial Counseling
Providing access to financial counseling can help your employees manage their finances more effectively. This can include services such as budgeting advice, debt management, and retirement planning. When employees feel financially secure, they are more likely to be happy and engaged at work. It also shows that you are taking care of them!
4. Volunteer Days Off
Many employees are looking for ways to give back to their communities. By offering volunteer days off, you are not only providing an opportunity for employees to do good but also showing that you care about their interests and passions.
5. Giving Profit Percentage to Non-Profit
Consider donating a percentage of your company’s profits to a non-profit organization that aligns with your company’s values. This can not only benefit the non-profit but also show your employees that you are committed to making a positive impact in the world, which is especially important to millennials and Gen Z.
6. Yoga/Workout Classes at the Office on Wednesdays
This one might seem crazy and I get that. However, offering yoga classes or workout classes at the office can be a great way to promote wellness and relaxation among your employees. Yoga has been shown to reduce stress and increase productivity, making it a win-win for both your employees and your company.
In conclusion, offering unique retention levers can help you keep your top talent engaged and loyal. Whether it’s through promoting health and wellness, offering financial counseling, or providing opportunities for employees to give back to their communities, these benefits show your employees that you care about them as individuals and not just as employees.
The 4-Day Workweek: Should You Try?
The 4-Day Workweek: Should You Try?
Are you worried that your employees look anxious and tired? Are you concerned about losing your best employees to higher paying jobs at big companies?
Little Sales Pitch Before You Keep Reading: Looking to consult with someone about your HR needs? We can help with any of your small business needs: HR for Small Businesses
We consult with our clients constantly about the "Hiring and Retention Levers" that small businesses can pull to reel in the best talent for their organization. We suggest levers such as more PTO, schedule flexibility, personalized anniversary gifts, and more to set you apart as an employer. However, there is a new concept that is turning a lot of heads: The 4-Day Work Week.
Before you stop reading this email because a 4-day work week is impossible, I suggest you look at this case study in the UK. Companies are testing out this 32 hour work week hoping to reduce burnout, retain staff and recruit excellent employees. You may call 32 hours part-time, but many companies are calling this full-time and providing regular benefits and PTO. Let's break down the positives and the negatives:
Positives due to case studies mostly done outside of the US
Work satisfaction is up
Work happiness is up
The most shocking: Job productivity is actually up
Without surprise - Retention is up
Negatives:
We don’t know the long-term effect on productivity because the studies are too new
Employees might also be more stressed to get their work done in a 32-hour week
What do I think:
It really depends on your company and what you are hearing from your employees.
A good way to see if it might work for you is to do a test period. Tell your employees that from June to August, everyone will be expected to get their full jobs done, but that the office will close at noon on Fridays. Talk with your leaders first about how this can be accomplished. This will not work for all companies, but it might work for yours.
You will be surprised how excited your employees are with just the 4 hours off. You may even be surprised by how much productivity increases. You also may see less people giving their notice to quit.
I know it is one of the stranger concepts we have suggested, but you won’t know until you try. Sometimes you have to be different to set yourself apart.
Check out recent articles on the study and the articles that are being written right now around this concept:
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.