by Rod Robertson, Managing Partner of Briggs Capital and co-author of “The New World Of Entrepreneurship: Insiders’ Guide To Buying And Selling Your Own Business In The Digital Age“
Given the huge numbers of workers who have left their companies during the Great Resignation, employee retention strategies arguably never have been more important.
When high-quality workers exit, it’s costly for companies to replace them. And high turnover is exacerbated when there’s a dropoff in talent and productivity. That could happen during the interim interviewing period, or it could be seen in the substandard performance of the newly hired employees themselves, and business performance suffers as a result.
Unwanted turnover has a major negative impact on a business’ metrics, its culture and its reputation in the marketplace. Sometimes you don’t replace a top employee with someone as good or better. So having an effective employee retention strategy is absolutely imperative. The best companies don’t give their best employees reasons to walk, but rather, to stay and grow in step with the business that they’re helping prosper.
Retaining top talent enables a company to attract more high-level performers, increase employee engagement, boost productivity and increase revenue. Therefore, companies need to understand what causes people to leave or stay and take the appropriate actions to ensure top employees are appreciated, happy and committed.
Here are some tips to business owners to improve their employee retention:
Give management a bigger stake.
Upper-level management personnel who consistently make a difference are long-term keepers, and the owner should consider making them part owners in the business. This will tie them to the company and incentivize them to be the best leaders and revenue drivers they can be. Giving up 10-15% of your company to them benefits everyone. Without them, the value of your business will shrink anyway. Better to give it to key employees who lead the way in increasing the company’s value.
Set up profit sharing.
Giving key employees and managers a slice of the company, through profit sharing, is another win-win because it encourages a culture of collaboration while further motivating and rewarding more stakeholders. Employee profit sharing gives them that important extra lift of appreciation while making the rank and file feel truly involved and responsible for the company’s growth. You don’t want to be looking to replace any employees being lured away in the labor shortage because you wouldn’t share the wealth.
Go after “boomerang employees”.
Those that left your firm for better pay, benefits and culture will come back if you open your mind to their needs – if reasonable. Your being flexible with them can catapult your company forward. Showing you’ll do what it takes to retain your best and brightest energizes all high performers and makes them want to be a part of the company’s future. You know them and their skills and idiosyncrasies. Tailor attractive employment packages and lure them back.
Contribute to home-related costs.
A special incentive that sets companies apart in terms of employee retention is related to residential considerations – paying relocation fees, paying partial rent on housing that’s tied to employment, or paying closing costs on a home for key employees who are moving closer to headquarters.
Don’t forget the pets.
Providing pet food vouchers, pet walkers/sitters, and even pet insurance are ways to an employee’s heart. On designated days you can allow employees to bring their dog to work. Companies can partner with organizations that have licensed therapy dogs. Allowing bereavement leave after the loss of a pet or time off to volunteer in an animal shelter are other ways companies can embrace pets, and in the process, show employees you care.
There isn’t much margin for error in this new business world we live in, where many workers have gained leverage and decided to find greener pastures. The bottom line is your employees drive your business, and when the best ones get away, you’ve got a problem that may be hard to fix.
Rod Robertson is an international entrepreneur and co-author, with Stuart Robles, of “The New World Of Entrepreneurship: Insiders’ Guide To Buying And Selling Your Own Business In The Digital Age“. Robertson is the owner of Briggs Capital, a boutique international investment bank. He has conducted business in over 15 countries while focusing on developing small-to-medium-sized businesses and taking them to market worldwide.