Taking the time to invest in attracting the right people, and then keeping them, will help your business see great rewards.
Recruiting and training an employee can cost as much as 2.5 times the amount of that employee’s annual salary. Because of this, a high turnover can be devastating to your business’s bottom line. Finding an hourly, low-wage employee, for instance, can cost between $4,000 and $7,000. If you need to replace someone with specialized expertise or specific training, plan to spend up to $40,000. If the employee is at the executive level, don’t be surprised if it costs $125,000.
What Affects Job Satisfaction?
Employers are often overly confident in how satisfied their employees are. Taking the time to understand what affects the job satisfaction of your employees is the first step in attracting and retaining employees well.
Before you can start working on creating the right environment for your employees, you must have an environment where those in the position to make a decision communicate well. Managers don’t always have a good handle on what’s bothering employees, where HR might. On the other hand, HR may not feel comfortable confronting management about areas that need improvement. An open mindset on both sides will go far in improving the workplace for your employees.
Turnover can be a sign of poor job satisfaction. If you’re experiencing a higher than usual turnover rate, consider these dos and don’ts:
• Don’t ignore the reasons employees list for leaving. If you are noticing a trend, you can take steps to eliminate that problem. Ask employees why they are leaving, and take their responses to heart.
• Review the costs associated with hiring, retention and turnover. It’s easy to underestimate these costs since turnover and hiring are not on the same timetable.
• Don’t be reactive. Instead, be proactive and find out why workers might be dissatisfied, so you can make the changes BEFORE they’re on their way out the door.
• Look at all of the costs, including recruitment, interviews, orientation, hiring, training, benefits, salaries, terminations, severance packages, lost productivity, etc. Individually these costs may not seem important, but when you look at the whole package it is easy to see why employee satisfaction is important.
• Do ensure hiring, training and retention strategies are working. Follow up after six months and then a year. If you’ve retained top employees, then great.
• Do attract Gen-X and Gen-Y talent through technology. A modern website, social media presence and embracing mobile options will help you attract the top talent from these younger generations. Emphasize your corporate culture to help keep them. Use social media to keep them connected to your group so they feel more at home at your business.
• Do hire carefully. Ensure your recruitment efforts are reaching the top talent, and then screen them carefully so you can make smart hiring decisions. Check credit scores, psychological profiles, criminal records, educational accomplishments, drug tests and professional background checks to complete your diligence in the hiring process.
• Ask your best employees their opinions. You want to keep your best employees, so ask them where you can improve. Find out what might turn them away from your business so you can add those features and keep them feeling engaged.
• Don’t assume money is the answer. Employees are motivated by money, but intangibles can go far as well. Recognition, challenging work and the ability to work autonomously can all improve job satisfaction in ways that money can’t.
• Do have a paper trail. Make sure all employees know your policies and procedures, and that you have paper copies with their signatures to back up their understanding. The more you document, the fewer complaints you will have. You’ll also find less of a chance for a lawsuit with a strong paper trail.
• Do look closely at your benefits. Are you overlooking some benefits that may attract more talent?
• Do be creative in the perks you offer. Today’s talent wants to see options like telecommuting, teambuilding activities and flex-time options. You will retain more people and hire better talent if you can add things like this to your company.
Your organization relies on your employees for success. Evaluating your hiring and retention practices does take time, but it’s time that will help you retain the heart of your business.