More than money: Mastering the real keys to employee retention

Ever wonder what it really costs when an employee walks out the door? Sure, you've got the obvious stuff: posting job ads, time spent in interviews, and the whole onboarding process for your new hire. But here's the kicker - what about the productivity that grinds to a halt while you're getting your newbie up to speed?

We dove into the numbers, trying to pin down the real cost of employee turnover. And while it's a slippery fish - estimates range from 40% to a staggering 200% of an employee's annual earnings - one thing is clear: losing an employee can be a heavy hit to your bottom line. And that means keeping your team intact is more than a nicety - it's a necessity.

Now that we've got your attention, let's explore how you can keep your team engaged, motivated, and sticking around for the long haul.

Welcome to Momentum Business Insights, where we share our 21+ years of experience as business coaches helping small business owners thrive.

Imagine walking into your office each morning, greeted by a team of enthusiastic and committed individuals, all ready and eager to give their best to your business. Now, imagine if that weren't just an occasional occurrence but your everyday reality. Sound appealing? We thought so. 

Maintaining a strong, devoted team is a game-changer for any small business. In an era where job-hopping has become the norm, an employee’s longevity within your company is an important asset.

Addressing Misconceptions: Is It All About The Money? 

Many small business owners labour under the belief that salary is the primary factor influencing an employee's decision to stay or leave. While compensation is undoubtedly important, it's not the be-all and end-all.

Once again in attempting to research this area the statistics vary wildly but it is quite clear that there are several other key factors other than money that determine whether an employee stays or leaves. For those of you that love the research there are some links to websites below (1).

But it is clear, not all problems can be solved by throwing money at them. A bigger pay won't make up for a toxic work environment or a boss who doesn't value their employees' contributions. Employees are looking for more than just a pay check - they want to feel valued, respected, and appreciated.

Feedback is Fuel

Richard Branson, the mastermind behind Virgin Group, famously said, "Train people well enough so they can leave, treat them well enough so they don't want to." And a major part of treating your employees well lies in one simple act - giving them feedback.

In our 21+ years as business coaches, one theme consistently resonates amongst employees: they crave feedback. It's not just about annual reviews or formal meetings; employees desire ongoing, constructive feedback that helps them understand how they're doing and how they can improve.

As Bill Gates once said, "We all need people who will give us feedback. That's how we improve." This feedback can take various forms - it might be a regular check-in meeting, a quick chat at the end of the day, or even an email summary of recent accomplishments and areas for improvement.

Feedback isn't just for the employees, either. It's a two-way street that can lead to vital insights about your business and areas where improvements could be made. So embrace feedback, encourage it, and see how it fuels your team's commitment and performance.

Your people are your business's backbone - and when you create a culture of open communication and feedback, you strengthen that backbone.

Your Team is Your Greatest Asset 

"So often we hear business owners say that their team and employees are their most important asset, yet they never seemed to maintain that asset as well as they would a piece of machinery," - an observation we've made time and time again during our coaching journey.

Consider this amazing statistic. According to Gallup's 2016 Q12 Meta-Analysis report, businesses with highly engaged teams boasted 21% greater profitability (2). These figures underscore that employees who feel valued and respected are not only more productive but also more committed to their organization. This, in turn, leads to improved bottom-line results.

Treating your employees as valuable assets isn't just a nice sentiment; it's a strategic business decision. Provide them with the tools, training, and support they need to perform their best. Recognize their achievements, value their contributions, and provide them with opportunities for professional growth.

Your people are the heart of your business. As Lee Iacocca, the famous American automobile executive, once said, "The speed of the boss is the speed of the team." So let's invest in the team, and watch the business speed up.

The Power of Communication 

Effective communication - it's a skill that's often underestimated in its impact on employee retention. But if we were to distill our experience as business coaches into a single sentence, it would be this: When business owners truly embrace open, ongoing communication, they drive their businesses to new heights.

Embracing the idea of open communication can feel like you're entering a brave new world. As a business owner, you may even feel like you're over-communicating at times. But here's the truth: When you feel like you're over-communicating, you've probably just about got it right.

Your team needs to hear from you. They want to know the company's goals, understand how their work contributes to those goals, and hear how they're doing. Transparency builds trust, and trust fosters loyalty - a crucial component in employee retention. So, take the step, open the lines of communication, and watch your team - and business - flourish.

The 5-Step Retention Strategy 

We've talked about feedback and communication. Now let's put it all together in a 5-step retention strategy that you can start implementing today.

1. Give Regular Feedback: This is not limited to formal, annual performance reviews. Regular feedback could be a weekly check-in to acknowledge the progress an employee is making or the challenges they're overcoming. Recognize their effort publicly, in a team meeting or via company-wide emails. This regular acknowledgment helps to build confidence, encourages personal development, and fosters a sense of belonging and purpose within the team.
2. Prioritize Professional Development: A team that grows together, stays together. Encourage your team's professional growth by investing in their learning. This could be as simple as organizing weekly knowledge-sharing sessions, paying for online courses, or sponsoring their attendance at industry conferences and workshops. Creating a learning culture not only improves employee skills and productivity but also shows that you value their personal growth and are willing to invest in their future.
3. Offer Competitive Benefits: Salary alone is often not enough to keep top talent. In addition to fair and competitive wages, consider offering benefits like flexible working hours, work-from-home options, comprehensive health care, and wellness programs. These perks go a long way in showing that you care about your employees' well-being, both in and outside the workplace. It shows that you respect their work-life balance and are committed to supporting their overall well-being.
4. Build a Positive Culture: Establishing a positive and supportive work environment is paramount for employee retention. This goes beyond surface-level interactions and requires a commitment to inclusivity, transparency, and respect. Regular team-building activities, clear communication of company values, and enforcing a zero-tolerance policy towards workplace harassment are some ways to nurture a positive culture. A strong, positive culture attracts talent, drives employee fulfillment, and brings out the best in your team.
5. Recognize and Reward: Recognition goes hand in hand with retention. Make it a point to celebrate your employees' successes, big or small. This could range from acknowledging their hard work in team meetings, awarding employee of the month, to providing bonuses or extra vacation days for exceptional work. Creating a culture of recognition demonstrates to your employees that their hard work is seen and appreciated, making them more likely to stay with your company.

Each of these steps can play a crucial role in boosting your employee retention rate. However, they aren't a one-size-fits-all solution – different strategies will resonate with different teams. The key is to find the balance that works best for your business and your team.

Conclusion: Ignite Loyalty, Foster Growth

Retaining top talent is more than just good business practice—it's a strategic move that boosts your bottom line, propels productivity, and fosters a healthy and thriving work culture. When you consider Richard Branson's adage (yep we like Richards insights), "If you take care of your employees, they will take care of the clients," the importance of employee retention takes on a new dimension.

Over time, these practices - providing constructive feedback, recognizing your team as your most valuable asset, fostering open communication, and implementing a comprehensive retention strategy - become part of your company's DNA. They shape your culture, define your brand, and, most importantly, build a team that's committed to your company's success.

Remember, your employees are not just part of your business—they ARE your business. Their talent, dedication, and efforts drive your growth and success. It's only when they feel valued and appreciated that they can do their best work.

Now that you have these strategies in hand, it's time to implement them. Employee retention might seem like a big challenge, but with these tools at your disposal, you are more than equipped to rise to the occasion.

Next steps:

Ready to ignite loyalty, foster growth, and drive your business to new heights? If you're keen to explore more, we invite you to book a Clarity Call with us. Our expert team is ready to guide you every step of the way, providing personalized strategies and solutions that address your unique business challenges and goals.

Remember, Momentum Business Improvement is here to support you every step of the way. Let's embark on this journey together, improving businesses and changing lives. The success you've always dreamed of is within reach.

Momentum: Improve your business…change your life!

It’s more than the money fun statistics (1)

Source (1): Indeed, 16 Reasons Why Employees Choose to Leave Their Jobs

Source (1): HBR, Why People Quit Their Jobs

Source (1): Forbes, Discover The Top 5 Reasons Workers Want To Quit Their Jobs

Source (2) : Gallup, The "Q12 Meta-Analysis"