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How to Find and Keep That Good Employee (and Reduce Turnover)

Did you know that even in a small business employee turnover is one of the most costly and most ignored drains on a companyís revenue? Statistics show that on the average, businesses face an annual turn-over rate of 30% of their workforce each year. On top of that, the average cost to replace an employee is around 30% of that individualís annual salary. For a lower-level employee making $15,000 per year, that comes to over $4,000. Sound high? Not when you consider all the indirect and direct costs that can include time spent on applicant search, interviewing, training, lost productivity, unemployment insurance, overtime paid to other employees to cover that vacant position and potential lost customers. Here are some basic strategies for reducing your turnover:

  • Sell your business with a Ďcompany profileí. Have a written company profile that includes information about the company mission, size, environment, compensation programs, benefits and employee advancement opportunities. Tell prospective job seekers why your business is a great place to work! This will make potential applicants excited about working for you and will also help them determine if your company is a good fit for his/her long-term career interests.

  • Be prepare to find and hire the right person. This may sound like a no-brainer, but many employers donít put the necessary efforts and time into the recruiting process. A good application form and a successful interview will cover a lot of territory in a short period of time. A legal and complete application is an absolute necessity and can help eliminate candidates that donít have the basic skills and experience needed for the job.

  • Have a good job description. A comprehensive job description serves as the foundation for a successful recruitment and retention program. It should include key job duties, performance expectations, required skills and experience, education, hours of work, dress code, physical requirements and work environment. Once your employee is hired, itís a great document to have against which to evaluate their job performance. It also helps determine if the personís duties have expanded beyond what was originally anticipated, which may require you to consider adjusting that positionís salary range.

  • Develop targeted interview questions. A structured interview process keeps the focus on obtaining an overview of the job candidateís specific experience, knowledge and skills against whatís necessary to be successful in the position. Asking questions customized to the job duties and responsibilities provides additional information about the prospective candidate to help determine if he or she is a good fit for your company.

  • Be your own Colombo and check those references! Checking references is good tool to finding out about a candidateís strengths, weaknesses, operating style and previous experience. Personal references are not generally helpful, as they are often close friends of the applicant and therefore more than likely to give a biased report. You can improve your chances of obtaining relevant information by requesting professional references who have firsthand knowledge of the applicantís work performance, such as past supervisors, subordinates, or clients. And when contacting references, stick to questions related directly to job performance.

  • Provide feedback and supervisory skills training. Once youíve made that great hire, focus on retaining and developing your talent. HR surveys indicate employees often cite the poor supervisory skills of their bosses as a reason for leaving their jobs. Donít assume your employees know if their performance is or isnít satisfactory job. Give them praise when warranted, and donít hesitate to constructively discuss specific areas for job improvement. Make sure your supervisors have these skills or offer the training tools needed to develop them. No matter how much you invest in great company benefits and attributes, a bad supervisor can seriously override those efforts and practically run good employees out the door.

  • Ask questions! The best way to determine an employeeís job satisfaction and/or reason for leaving is to ask. This can be done through an employee survey and a structured exit interview process. Both identify issues that could impact retention, such as competitive pay, scheduling, work flow, lack of job challenge and the skills of your supervisors. Information gleaned from surveys and exit interviews can help you fine-tune your job practices and lower employee turn-over rates.


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