Convenience store turnover is staggering—100% is typical, and 200% is common among hourly retail employees. Yet, in a Fortune magazine survey of the most admired companies, “the single best predictor of overall excellence was a company’s ability to attract, motivate and retain talented people.”
Training and preparing employees for advancement is one proven method for attracting and retaining these talented workers.
If you’ve ever lost a good employee, you know it hurts, both emotionally and financially. While you probably never wanted to add up all the costs associated with the loss, if you did, you’d realize they include not only the loss of that person’s experience and knowledge, but also a cost in terms of employee morale and customer satisfaction. Then there are the expenses that can more easily be quantified—the administrative work related to termination, job vacancy, and replacement (including the time and expenses associated with recruiting applicants, interviews, testing, administrative expenses, medical exams or drug testing and orientation).
While Harvard Business School found replacing an employee is likely to cost twice the person’s annual salary or wages, the U. S. Dept. of Labor estimates the cost of replacing a worker to be one-third of their annual income. At only $7.25 an hour, that adds up to just over $5,000 for every frontline, hourly worker who walks—or is booted—out the door. Bottom line, losing any employee is expensive and losing a great one can cause untold damage to the organization.
On the other hand, when employers successfully reduce employee turnover, profits increase. Specific results vary widely, but, in one study, reducing turnover by just 2% improved profits by 4%.
For these reasons, every employer, no matter how large or small, needs to have an employee retention strategy. If you don’t want to be caught in the embarrassing position of trying to close the barn door after the horses are out, employee retention deserves your attention today.
One way to develop a retention strategy is to make a list of the people you don’t want to lose and next to each name, write down what you are doing or will do to ensure that person stays on board.
The key to this process is to realize that what gets you out of bed in the morning is not the same as whatever it is that motivates your employees. Let’s take a wild guess and say you’re a Type A, overachieving, entrepreneur—you love the challenges of owning, building, and running a business. Conversely, your employees are not. So, what are their motivators?
For the past 10 years, the results of surveys on this subject have pretty much been the same. Workers want:
1. Open communications and good relationships with bosses and co-workers.
2. Opportunities to learn and grow.
3. Interesting work.
4. A manageable work/life balance.
This is where training comes in. Continuing education in the form of on-the-job or off-site training is one solution that addresses two of the four needs. Training is all about learning and growth, and training keeps work interesting.
Seems simple enough, and yet few employers have a retention strategy, and even those that do don’t always include on-going training in the mix. This is usually because the organization is so caught up in urgency that management fails to realize the importance of learning and career development not only to the employees, but to the success and survival of the organization as well.
According to business guru Stephen Covey: “Just 20 years ago, manual labor represented 70-80% of the value added to goods and services. Today, knowledge work represents 70-80%, while manual labor is more like 20-30%. We have moved into an information/knowledge-worker age in an unbelievably rapid fashion.”
Besides reducing turnover and boosting profits, training programs normally lead to an increase in job satisfaction and morale, increased employee motivation, increased efficiencies in processes and an increased capacity to adopt new technologies and methods.
One way to offer training is through full or partial tuition reimbursement. Another is to make use of state and federal government training programs that may be inexpensive or even free. There are books, training films, on-line courses and webinars, teleconferences, as well as training specialists who will come on-site. If funding is an issue, give your best people 10 minutes in the weekly meeting to show and tell others how they do what they do. Job rotation or cross-training is another great, low cost way to keep work interesting for everyone.
If vendors and suppliers offer training programs, make good use of them. While you probably count on your equipment manufacturers to keep everyone up to speed when it comes to sales, installation and service, there are hundreds of other subjects that can satisfy your employees’ need to learn and grow:
• Communications: Address the various methods of communication and their effectiveness.
• Computer skills: Basic computer skills are becoming a necessity for most jobs.
• Customer service: Helps employees understand and meet the needs of customers.
• Diversity: Diversity training usually includes education about how people have different perspectives and views and includes techniques to value diversity.
• Ethics: Today’s society has increasing expectations about corporate social responsibility.
• Human relations: The increased stresses of today’s workplace can include misunderstandings and conflict. Training can help people get along in the workplace.
• Management skills: Can include employee recruiting, selection, retention, motivation, dealing with difficult people.
• Quality initiatives: Total quality management, quality circles, benchmarking and other established methods require basic training about quality concepts, guidelines and standards for quality.
• Safety: Safety training is critical where working with heavy equipment, hazardous chemicals, foodservice, etc.
• Sexual harassment: Sexual harassment training usually includes a careful description of the organization’s policies about sexual harassment and inappropriate behaviors.
Break the task of developing on-going training programs into smaller, logical steps:
1. Determine your needs. What kind of training programs will best address current and future company needs or will provide the biggest payback?
2. Choose quality instructors and materials. Who you select to conduct any training will make a major difference in the success of your efforts, whether it’s a professional educator or simply a knowledgeable staff member.
3. Clarify connections. Some employees may feel that the training isn’t relevant to their jobs. Help them understand the connection early on so they don’t view the training sessions as a waste of time. Award completion certificates at the end of the program.
4. Deliver on-site training in small bites. One to two hours per week gives people the opportunity to practice what they learn on the job right away.
5. The best way to learn is to teach. Have those who go to off-site schools or sessions teach your other employees upon their return.
6. Measure results. Decide how you’re going to obtain an acceptable rate of return on your investment. Determine what kind of growth or other measure is a reasonable result of the training you provide.
Training capitalizes on the mind’s amazing ability to continue to learn and grow over our entire lifetime. With the right kind of training, OK employees can become good employees, good can become great, and the great become
even greater assets. Better yet, ongoing training benefits employees and the organization in equal measure in terms of reduced employee turnover and improved profitability.