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Employee Retention Saves You Dollars!
Ten Plus Ten Solid Suggestions
How Can We Avoid Turnover?
1. What makes your winners tick? Do everything
reasonably possible to keep the winners on your team. Since each person's
needs are different, you may be treating different winners differently.
2. Watch your pay scale. You need to be competitive
with not only your direct competitors but also your indirect labor
competitors (retailers and industry).
a. For these employees, how
important is the pay rate to them, vs. benefits? Two
weeks paid vacation may cost twice as much over the year as a ten-cent per
hour
raise . . . but which catches their attention?
b. If/when minimum wage
increases, some of your competitors may pay new hires the
new rate before the mandated new rate is effective.
3. More careful hiring practices. Could an extra 5
minutes invested in an interview, discussing the expectations of both
employer and employee, stop a hiring mistake from being made?
--Although caution is advised in
hiring new staff members, your competitors are making
on-the-spot offers, so you need to make the decision quickly.
4. Staff incentives for successful recruiting. The
best staff you have generally are around other good recruits. Offer
an incentive for a referral of a new staff prospect if the current staff
member and the new hire remain employed for a short period of time (say two
months). This keeps two people with you!
5. Talk to your employees. Try not to make this a
gossip discussion, but find out a little bit about what is going on in the
store and with your employees. Finding each employee's "Hot
Button" and/or problems can help you target your incentives and
disincentives.
--Asking for operating suggestions,
then implementing and recognizing the good
ones, helps them feel that they are playing a part in the success of the
business.
6. Praise your employees for a job well done. This is
free! You're reinforcing positive behavior.
--Avoid sarcasm. Does the
staff always know when you're kidding?
7. Don't YELL! Be kind, even when criticizing.
Try your best to discuss "improvement opportunities" with staff
away from the customers and away from co-workers. "My boss
yelled at me" is cited as the #1 reason for leaving a job . . . no
mention of whether it was justified!
8. Use incentives. We've listed 10 incentives below,
but feel free to be creative. Set incentives to meet individual
needs.
9. Teach. All staff, no matter what their long term
goal with your company, do want (and need) to learn something new
each day. This should also help decrease the possible boredom of the
job.
--Formal training. Does
someone from your staff (preferably the owner or senior
manger) sit down with someone and go over the employee handbook/rules,
discuss product or service, and discuss general expectations? Even in
the days of
standardized Internet training, face to face training has a powerful
effect!
10. Soar with the eagles, don't sink in the sewer. If
you have someone who brings the morale and the quality of the whole store
down, get rid of 'em! Better to be short
this one person than to loose three others, or loose customers.
What Incentives Can We Use?
The incentives you use need to be geared toward the values of the people
you employ.
1. Medical Insurance. This can be a very valuable
benefit but a very expensive one to the employer (up to hundreds of dollars
per month per person). You can require employees to pay some portion
of the insurance, employees to pay all of the insurance, or the employer to
pay all. Making it "available" seems to be a good
selling point, even if they have to pay.
--Life Insurance. The
employer may provide group term life insurance of up to
$50,000 value to all eligible employees. This is an expense deduction
for the
employer, not income for the employee. Relatively cheap!
2. Cafeteria Plans . . . also known as Section 125
Plans. This makes much of the medical insurance paid by your staff a
"pre-tax" deduction, meaning it can save an employee hundreds of
thousands of dollars in taxes . . . and save a bit of money for the
employer, too. Free cafeteria plans are offered by insurance
companies (in exchange for the "opportunity" to offer other
products to your staff), but the agents tend not to want to work with a
high-turnover employer.
3. Medical Reimbursement Plans. "A Personal
Favorite." This can be used with or without other medical
plans. A MRP requires a written plan, then the employer reimburses
the employee all his or her medical expenses for the period up to a certain
dollar amount. The reimbursement is tax deductible to the employer,
but tax-free to the employee. This does require the employee to
submit paperwork each period, and the employer must process it. All
employees who meet certain tenure requirements (such as one year) and/or
certain hours worked must be covered.
4. Retirement Plan (401k, SIMPLE, etc.). A good
recruiting point, even if it isn't used by employees. (But if it's
not used, the owner may be limited on his/her contributions.) Most
plans feature some employer matching (as little as $1 for every $4).
There is a cost from the bank/broker to administer a 401k, which may negate
the savings. A SIMPLE plan is good for a small business which wants
low administration costs and expects low employee participation.
5. Credit Union. Think of a credit union as a
not-for-profit bank, available only to employees (and the families)
of the sponsor companies. Make it available for your staff to join,
and make payroll deductions and direct deposit available options. The
employer's being a CU sponsor costs the employer nothing and should
build some employee loyalty.
6. Vacation Pay. Since this doesn't kick in until
they've been with you some time, this benefit would seem to promote
tenure. Make sure that your "average" staff understands the
dollar value of the vacation pay.
7. Bonus and/or Incentive Pay. A bonus is an
"unexpected" reward for a job well done. An incentive is a
tangible recognition of meeting certain pre-set goals.
a. "Stick With Me"
incentive bonus . . . a bonus of X cents per hour, paid at the end of
a
particularly difficult period, for hours worked during the period.
Example might
be
a bonus of 25 cents per hour for all hours worked during December (which is
a
difficult month for staffing the store), payable to everyone who is still
employed at
January 2.
b. The bonus may take the form
of a small gift, such as movie tickets, gift certificates,
or
gas money. Although bartering with other businesses to obtain these
gifts is
possible, be sure top management is aware of what you're doing.
Trading food (or
other products) between stores can easily get out of hand!
c. Set incentive terminology
to meet staff's hot buttons.
d. Your CPA reminds you that all
pay, including Christmas bonuses, is taxable to the
employee as wages. Exceptions may include certain (very) small items
or certain
safety bonuses. Bartering with other businesses is a taxable event.
8. Bonus Time/Days Off, with pay. This could be
something as simple as after a hard/good day, sending key staff members
home early but paying them through their normal scheduled shift.
9. Advancement. Not all your employees are looking
for advancement, nor are all of them suited to be management.
However, you can gear the training of your better employees toward
management duties. Remember to increase compensation as duties
increase.
10. Flexible Schedules. The nature of any business is
that we need to have staff available as the customers come in. For
most restaurants, that means a few hours at lunch, some in the evening,
with extra on the weekends. These hours are frequently the ones that
staff would prefer to be on a date or at home!
a. What work can be done at
different times to accommodate our staff . . . can some
of
the clean-up and prep be done in the morning rather than late-night, or
vice
versa.
b. What incentives can we give
our customers to move (and retain) their purchases to
off-peak hours?
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