2 Ways to Retain Quality Employees

Max Messmer, chairman and CEO of Robert Half International, states “Companies that lose top performers may not only experience declines in productivity but also incur significant costs in replacing these professionals.”  The cost of unwanted turnover can be 1.5 times an employee’s annual salary.

Many talented employees leave organizations because they were either miscast for the job, management style, or corporate culture.  But most of the time, employees leave because of some kind of conflict with their boss.

“People leave managers, not companies. If you have a turnover problem, look first at your managers,” Marcus Buckingham and Curt Coffman write in First, Break All the Rules.

Communicate with your employees. Silence from management leads to wild speculations that are deadly to employee morale and the health of the organization. Stop rumors in their tracks by being honest with your employees about what is happening in the organization. Create an environment that fosters open communication by encouraging your workers to share their concerns with you, and behaving in a way that assures them that you will NOT hold anything they say against them.

Be an effective, ethical leader. A well-known study published by Florida State University in Fall 2007 issue of The Leadership Quarterly stated that:

• 39% of workers said their supervisor failed to keep promises
• 37% complained their supervisor failed to give credit when due
• 31% said their supervisor gave them the “silent treatment” during the past year
• 27% report their supervisor made negative comments about them to other employees or managers
• 24% stated their boss invaded their privacy
• 23% said their supervisor blamed others to cover up personal mistakes or minimize embarrassment

The cost of turnover is more than just the cost of hiring a replacement.  There are also costs associated with training, and maintaining the highest quality production or  service while you are retraining that replacement.

If a particular department or manager has a very high turnover rate, it may be time to consider the cost of retaining that manager.  If you are a manager who is experiencing high turnover in your department, it may be time to reevaluate your management style.

Employee retention is critical if you expect your business to be successful.