News From Terre Haute, Indiana

July 21, 2013

Business cents: Strategies to retain employees

Heather Penney
Special to the Tribune-Star

TERRE HAUTE — One of the most critical and expensive items for a business is employee turnover.

Turnover can cost the company several thousand dollars by the time the business has to advertise the position, recruit, filter through candidates, select a candidate and provide training, which can cost not only significant time but also overhead expenditures.

You may be asking yourself, “Why are the employees leaving?”

According to the Bureau of National Affairs, the annual employee turnover is 14.4 percent.

 The U.S. Department of Labor estimates that a minimum wage employee costs approximately $3,700, to replace and an employee in the private sector costs approximately $13,300 to replace.

 In every industry there are some valid reasons why people leave their jobs along with some myths on why people leave. I have listed some of the common misconceptions managers think of about why an employee is leaving.

1. People often leave a company for more pay.

2. Incentive programs produce long-term benefits, increase productivity and morale.

3. People don’t want more responsibility.

4. Loyalty is dead.

5. Improving employee satisfaction is expensive.

6. Employee satisfaction is “fluff.”

7. Supervisors are the problem.

Now that all that is out of the way, let’s concentrate on the good aspect of employee retention.

1. Be sure to value your employees.

2. Employees who contribute to how the work gets done are more engaged and loyal.

3. Pay and benefits do matter, but that still can’t buy “commitment” from the employee.

4. Provide learning and development opportunities.

5. The Golden Rule: Treat others as you would like to be treated.

6. Transparency, people like to know what is going on.

7. Hire as if you are choosing friends and family members.

As you begin to review your policies and business climate, you begin to question some aspects of your company. Be sure you work well with your staff, identify their strengths and provide the necessary tools for the employee to leverage their talent.

Be sure to take an interest in each employee if possible.

I had the opportunity to meet with a large employer in the Wabash Valley, and one of the owners of the 150+ employee business walked around each morning to greet many of the workers.

He knew where they were from, what hobbies they had, if they had children and much more.

This did a couple of things for him. First, it made him much more approachable because employees felt as though he was one of them.

 Second, it made the employees feel valued and therefore they wanted to work more efficiently at their jobs.

To increase employee retention there are many strategies and steps that should be taken.

 If you need assistance in identifying how to engage and retain your employees be sure to seek assistance from a local business consultant, SCORE or the Indiana Small Business Development Center.

Heather (Penney) Strohm is the regional director for Indiana State University’s Indiana Small Business Development Center.