By the time you try to give them raises, they’re already out the door. If you want to retain your best people, you need to start much sooner.
The Evening Standard recently reported that 60% of Londoners would be looking at new jobs in January. The average rate of staff turnover in the UK stands at 15%, with the cost of new staff totalling at least £4.13bn, according to a report by Oxford Economics.
Losing key staff will inevitably leave a void, with lost productivity searching for and training a replacement often unmeasured yet arduous. You may also have to offer a higher salary to attract new talent, only to find the replacement is not as good as the job as the person who left.
Pay stars what they’re worth
Pay isn’t everything; a survey of HR executives found that 32% of respondents said it was the primary motivator for their staff leaving. So 68% of the time, money wasn’t the main influence.
The cost and hassle involved in replacing staff shows that resisting paying your best staff above market rate to save money is fallacy. Most of the best people won’t ask for it, and instead eventually get frustrated and quit, leaving you to spend more money in replacing them than it would to have given them a raise.
Losing a middle manager costs an organisation up to 100% of their salary.
It is worth remembering that a great salary normally attracts a person, but doesn’t necessarily keep them. Opportunities to lead projects, participate in teambuilding days or social events and other initiatives that illustrate your company genuinely cares for staff often outweigh salary.
This is reflected in the results of a survey by McKinsey, which looked at what it takes to retain people. The results found that both management and staff alike rate nonfinancial incentives such as praise from their direct report, attention from leaders, promotions and training opportunities were the most effective motivators.
Manage people, not things
The reality is people leave managers, not companies. If a manager doesn’t make their staff feel valued, then higher turnover is inevitable. It’s the little things that count – saying thank you goes a long way.
The statistics show a manager also needs to be more than just a nice guy. Most complaints centre around:
- A lack of clarity about expectations
- A lack of feedback about performance
- A lack of clarity about earning potential
- Failure to hold scheduled meetings
- Failure to illustrate how they contribute to the organisation
These aren’t unreasonable demands – staff wish for varied and meaningful work which can lead to career development.
The famous American engineer, management consultant and author W.Edwards Deming used to pose the question – “What about the work system is causing the person to fail?”
Rather than blame the person, Deming urged companies to consider the process. If a staff member is frustrated by not having the right tools, the right time or right training, they are going to become frustrated. From the company’s perspective, they will be neither effiecient nor effective, regardless of their talent or skills.
Use systems to foster common purpose
A common goal is what brings people together, and knowing how they can contribute is a vital aspect of staff engagement. The first steps in achieving this is giving clarity in a role in terms of:
- What do they do?
- How do they do it?
- When do they do it?
- Why do they do it?
The ISO 9001 management standard helps organisations map out their processes to achieve this goal. By taking a wider perspective, often opportunities are found to improve communication between departments, remove or refine outdated processes and create a better working environment as a result.
Involving and challenging staff in projects like this is what keeps them motivated; good people want to contribute outside of their work area. Who knows, you could have the next Mark Zuckerberg in the midst of your team, but without actively seeking out this sort of behaviour you’ll never find out!
Kent CIPD HR Awards Dinner 2017
We’ve partnered up with the Kent branch of CIPD who are honoring excellence in HR at an awards dinner. To demonstrate BABs’ dedication to HR we are sponsoring the ‘HR Professional of the Year Award‘.
The event will be held on Thursday, 23 March 2017 from 19:00 to 22:30 (GMT). The venue is in Ashford, Kent.