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Don Amerman

Don Amerman is a freelance author who writes extensively about a wide array of business and personal finance topics.

Don Amerman has written 5 articles for SB Informer.
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Are Your Workers Leaving You Too Early?

Don Amerman

January 24, 2014


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Long gone are the days of the so-called "company man."

That was an era during which most young people heading out into the working world aspired for nothing more than to be hired by a company that they could grow with throughout their career. Highly valued was the idea of becoming part of a company's "family" of workers.

Today, workers are far more mobile, moving frequently from one job to another and in the process adding multiple employers to their resumes.

For most employees that work at small businesses, the process is seen as the cost of getting ahead.

For employers, this high rate of voluntary turnover -- workers leaving their jobs of their own accord -- represents added costs that eventually impact the company's bottom line.

Employee Turnover Costly

In a November 2012 article written for the Center for American Progress, Heather Boushey and Sarah Jane Glynn evaluated 30 case studies cited in 11 research papers about the cost of employee turnover.

They found that it costs employers roughly 20 percent of a worker's annual salary to replace that worker. For companies experiencing high levels of turnover, these added costs in some cases can mean the difference between profit and loss.

Involuntary turnover -- employees dismissed by their employers -- isn't necessarily as costly to companies, because many of these employees are let go because their jobs are being discontinued or phased out.

High Rate of Turnover

Based on data from the U.S. Labor Department's Bureau of Labor Statistics, voluntary job turnover in the 12 months from November 2012 through October 2013 totaled nearly 20 percent, averaging 1.65 percent each month over the year-long period.

Even in a relatively fragile economy with job security a major concern for many Americans, worker turnover continues at a surprisingly high rate.

Any strategy to improve your company's rate of employee retention should first take into consideration the major reasons that employees decide to leave their jobs.

Higher Pay Only One Reason

Although many workers move to new jobs for increased pay, it is only one of several motivating factors for voluntary worker turnover.

Two Gallup polls conducted in 2006 indicate that money is important, but it doesn't buy company loyalty.

The primary reason employees gave for changing jobs was for career advancement and promotional opportunities, cited by 32 percent of those polled, while 22 percent said they were changing jobs for reasons of pay and/or benefits. Twenty percent said lack of fit to the job was their reason for leaving, and 17 percent said they were dissatisfied with management and the general work environment.

Other reasons included lack of flexibility in scheduling work hours, cited by 8 percent, and lack of job security, cited by 2 percent of poll respondents.

As to what your small business can do to retain valued employees, financial constraints may make it difficult, if not impossible, to deal with the 22 percent of employees who leave jobs for more money or more comprehensive benefit packages.

However, here are some suggestions of steps you can take to address other areas of employee dissatisfaction that may eventually result in worker turnover:

Closely Evaluate Supervisors

1. Closely evaluate your departmental supervisors and replace them if necessary. Employee dissatisfaction with management has less to do with whether their supervisors are likeable as individuals and more to do with how equitably they manage the workers on their team. Overt favoritism by managers can be demoralizing to those who see others on their team getting special treatment.

2. Don't let employees wonder from day to day what is expected of them. A good management team informs workers precisely what tasks they are expected to perform. When changes in these expectations must be made, supervisors must promptly advise workers to that effect. A worker who is never quite sure what he or she is expected to do is forever on edge and under a great deal of stress.

Encourage Workers to Speak Out

3. Create a work atmosphere in which all employees feel free to speak out about their concerns and also to offer suggestions about how existing operations might be streamlined or otherwise improved.

4. Establish a workplace culture that recognizes the close relationship of education to career advancement. Offer financial incentives encouraging employees to continue their education in fields relevant to the company's line of business or employees' specific job responsibilities.

5. Maintain a regular schedule of employee performance reviews so that managers can let employees know how they are doing and what, if anything, they may need to do to improve their work product.

Training, Tools, and Time

6. Supply employees with everything they need to perform their jobs. This means training the worker in all aspects of the jobs they have been assigned and giving them the tools and time necessary to perform those tasks.

7. To the extent it is possible within the framework of your company's small business; allow employees a degree of flexibility in setting their work schedules.

There is no way you can eliminate all worker turnover, but by taking these steps -- most of which will cost you little or nothing -- you should be able to hold on to valued workers for as long as possible.


                   



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