How much is high turnover costing you? While investing in your workforce can seem expensive, spending too little on training and employee compensation can negatively affect your bottom line.
Losing employees, particularly those with experience, places a burden on your business. The cost to replace a $10-per-hour retail employee is approximately $3,300. On the other hand, successfully engaging employees means they’re more likely to stay and grow with your business, reducing training and hiring costs. While raising wages or offering increased benefits isn’t always possible for every small business, every employer can better engage their employees.
In their new Good Jobs, Good Business toolkit, Pacific Community Ventures offers practical tips for small business owners to create jobs that boost the bottom line. Here are 5 ways to get started:
1. Create a culture of mutual respect and trust
When employees feel respected and trusted, they’re more loyal and more invested in their work. Ways to create a culture of trust and respect at your company include:
- Enabling an open dialogue between employees and management/ownership. Companies that report high levels of employee engagement provide opportunities for employees to speak with management or the owner(s).
- Recognizing employee success. Companies that regularly recognize employee efforts have 19% less turnover.
2. Identify key success metrics and connect them to employees’ roles
Sharing the critical metrics necessary for the success of your business can help employees understand how their own actions impact these numbers. When employees see how they influence business results, it can create a sense of meaning in their work, which can be motivating.
One leadership approach that emphasizes this idea is Open Book Management. This is guided by three basic points:
- Know and Teach the Rules – employees should be provided measures of the business’ success and educated on how to understand those numbers
- Follow the Action and Keep Score – employees should follow progress on the key numbers and take action to improve performance as necessary
- Provide a Stake in the Outcome – employees should have a direct stake in the organization’s success (e.g., bonuses, equity, or profit sharing)
3. Enable employees to innovate and participate in decision-making
When employees are encouraged to innovate, they’re more likely to enjoy their jobs. Seeking worker input on ways to improve efficiency gives employees ownership over their work. Productivity also increases when employees have a say in how they perform their roles. By being open to new ideas, you can also learn about problems and generate solutions more easily.
To support employees in offering ideas, it’s helpful to share your business challenges, their root causes, the constraints of current approaches, and to clearly articulate the end goal. Ways to create opportunities for innovation include:
- Hosting brainstorming
- Creating an
ongoing open dialogue
- Creating an ideas system
4. Emphasize core values
Communicating your business’s unique core values to your employees early and often can create a culture where employees understand and embody the values. Methods for grounding employees in the core values of your business include:
- Start the messaging early. Communicate the importance of the values during onboarding, and have workers sign a mission and values statement.
- Reinforce the values.Use on-going trainings, emails, and signage to encourage embracing these values. Inc. suggests 9 Ways to Reinforce and Live Your Company’s Core Values Every Day.
- Make it rewarding.Many businesses have had success with programs recognizing employees who embody the business’ core values.
5. Encourage employee growth
Supporting your workers through professional development is critical to keeping them engaged. Tactics vary by business, but here are a few ways to make employees feel like they’re growing with the company:
- Set clear goals and expectations. It’s key for you and your managers to set defined – and realistic – performance expectations during initial employee onboarding, periodic performance reviews, and throughout the year.
- Help employees succeed. It’s helpful to understand what keeps your employees from being more engaged, such as unpredictable scheduling, childcare considerations, or transportation challenges, in order to address obstacles where possible.
- Provide one-on-one time between employees and managers. Employees feel more engaged when supervisors meet individually with them. Regular check-ins between employees and managers can help to create an engaged and equitable work environment.
- Map out how employees can advance in their careers. Potential for employee advancement may vary depending on the size of your business, but there are many ways to support employee development.
It’s OK to ask for help getting started
If you’d like additional guidance on engaging your employees, free advisors can be found through places like SCORE, your local SBDC, and the BusinessAdvising.org platform, which connects small business owners like you with experienced pro bono business advisors who can offer advice on topics including HR, marketing, and other small business concerns.