As a Boston business owner, you have first-hand experience dealing with the intricacies of employee retention and turnover. Recruiting and replacing staff members are hot topics among businesses of all sizes, and cost business owners millions of dollars each year. In fact, according to the Boston Business Journal, approximately 75 percent of mid-size enterprise companies experience annual employee turnover of up to 15 percent. But in order to truly understand how to better recruit and retain employees, one must have
With the majority of Baby Boomers retiring or nearing retirement, employers are interacting with a group of younger workers who operate much differently than employees did years ago. Studies show the average employment span for a staff member in their twenties is just 18 months, which can create a revolving door of employees, frustration and extra expenses for Boston business owners. In a study by the Center for American Progress, it is estimated that the average cost to replace a $40k manager would be 20% of his or her annual salary, which is $8,000, but the cost to replace a high-level executive is up to 213% of the employee’s annual salary. That’s a major cost for a small business.
While some turnover is always expected, how can business owners retain their best and brightest before they make a move to the competition? Below are seven tips Boston business owners can take advantage of to increase employee retention in 2015:
- Recruit intelligently – One key aspect for reducing employee turnover is an effective recruitment strategy. It starts by screening candidates properly and ensuring that the candidate will fit into your company culture well. When interviewing candidates, don’t just ask questions such as “What do you find most challenging?” Instead, ask them this way: “Tell me about a time when you felt the most challenged.” Asking situational questions will give you more insight into how he or she truly handles these scenarios, and will hopefully surface any potential red flags.
Furthermore, ensuring that job descriptions include an accurate portrayal of the position that candidates are applying for is critical. Misleading descriptions may have more people submitting their resumes to join your team, but can quickly lead to dissatisfaction and higher turnover for your business.
- Don’t skimp on salary – Competitive wages and attractive salaries are at the top of the list when it comes to retaining employees. Be sure that your pay rates are on par with your employees’ experience and skill levels, as well as the geographical location of the position. Employees in cities, especially in the Northeast and on the West Coast, are often times paid higher salaries than those in small towns. For instance, according to the Bureau of Labor Statistics, the average yearly wage for an office administrator in Massachusetts is $40,140, whereas the average rate for an office administrator in Illinois is $35, 680. Knowing exactly what your employees should be making can help you offer the most competitive salary and also prevent future conversations that pertain to low-salary compensation. If you are unsure
onhow much you should be paying your employees, use resources such as salary.com for up-to-date payscale knowledge.
- Tailor benefits to employees’ needs – Offering a comprehensive benefits package is a crucial aspect of retaining valued employees. In addition to offering essential benefits, you may want to consider including other benefits that meet the additional needs of your employees. For starters, your business should consider providing health insurance, life insurance, a 401k plan, and some paid vacation and holidays. In addition to offering essential benefits, you may want to consider other benefits such as dental & vision insurance, long & short term disability insurance, stock options, tuition reimbursement (especially worthwhile for employees who need to be up-to-date on technologies or educational requirements ), and an employee assistance program.
Next, tailor benefits to employees’ specific want and needs. Speak to them and ask what they would like to see included as a benefit option. Remember, typical one-size-fits-all, “9 to 5” work days are long gone, and flexibility can go a long way. Allowing employees to telecommute or take advantage of flextime may also increase employee retention.
- Provide incentives – Employees want to feel rewarded and appreciated for their efforts and the work they do, so thought should be given to how this can be accomplished through providing periodic recognition, rewards and offering small perks. This can include dress down Friday, an employer-sponsored lunch one day per week, letting employees leave early when major holidays arrive, sponsoring a free on-site wellness class such as yoga or self-defense, setting up free dry cleaning pickup and delivery, etc. You can even host a contest focused on reaching a business-related goal (with rewards, of course) that will keep employees focused on their
job,while giving them an incentive to reach further. It is important to tie the timing of any recognition or reward as close to the completion of work as possible to let your employees know their efforts did not go unnoticed.
- Maintain an atmosphere of open dialogue and exchange – Arrange regular meetings where employees can share their ideas and have input in an environment of open communication. This type of atmosphere will encourage employees to be honest with management and can go a long way to motivate productivity, collaborative effort and harmony among peers.
- Conduct retention focused one-on-one discussions – One way Boston business owners can retain employees is simply by getting a pulse on what they are thinking periodically. Often times, employees who have worked for your company for some length of time can feel forgotten or ignored. During your one-on-one session, consider asking the following questions:
- Why did they come to work for your company?
- What has made them stay?
- What issues or aspects might cause them to leave?
- What factors do they feel can be improved?
- Do they have any ideas they would like to share
?Duringthis session, you can also spend time reviewing benefits and salary. From an employee standpoint, the time you dedicate to this type of discussion will be greatly appreciated. Any employer who is paying attention and showing interest in what is important in the lives of his or her staff members can greatly influence employee retention. This is also a great time for you to have an open dialogue byallowing them to voice any concerns they may have about moving forward in your company.
- Consider the services of a professional HR company – Human resource responsibilities can encompass many different areas. Managing all of those responsibilities can take away a business owner’s precious time, which could otherwise be spent on generating more profit. Consider working with a Professional Employer Organization (PEO) that specializes in HR capabilities. The PEO staff will streamline and provide a solid infrastructure for your human resources management. In addition, they will manage employee benefits and payroll, and provide you with reliable, supportive, assistance and expertise for employee recruitment, onboarding
andemployee performance management. This will not only take tremendous pressure off of you,but ensure your employees are getting the best you can offer them. PEOs stay up-to-date amidst a constantly changing landscape of employment laws, regulations andtrends. Additionally, they can offer valuable benefit packages you may not currently have access to.
Hiring and retaining top-quality employees is a vital part of the long-term success and growth of your small business, but there are many considerations to make when planning an employee retention strategy. Please contact us for additional insights on retaining your valuable employees.