A business’ most valuable asset, employees are the most difficult resource to replace.
With 85 per cent of employees either actively looking for another job or open to speaking with a recruiter, business owners need to seriously thinking about how to engage employees.
After all, employee engagement – not remuneration – is the key to retaining a team.
People are the core of Australia’s two million SMEs, yet research shows that business owners failing to engage employees may risk up to $1 million in staff turnover every year.
Many business owners might rush to increase salaries to retain employees, but this will only hold their interest for a short while – it’s just a bandaid solution.
Employee engagement is the key to retention – and business success overall. Here are five reasons why business owners should be rethinking how they engage employees.
1. The (preventable) cost of employee erosion
It is estimated that staff turnover costs up to 150 per cent of a person’s annual salary.
In an organisation with 100 employees, an average salary of $75,000 and staff turnover of 18 per cent, that comes to around $1 million per year.
This figure accounts for recruitment, induction and the loss of productivity during the on-boarding period. Are you ready for a jaw dropper? Look at this number as a percentage of your overall profit line.
What people want is to feel connected to their employer, to feel like they are making a difference and like their efforts are noticed. There are a few things employers can do to keep their people engaged, but the easiest option is to focus on recognition.
RedBalloon feels so passionate about this that we started a whole new division of our organisation called RED, which helps businesses make employee recognition easy.
Recognising your people could be as simple as buying their favourite coffee when they have put in an outstanding effort, or giving them a gift voucher for their favourite store when they over deliver on a project.
2. Money is not enough to save them
Around 38.6 per cent of people jump ship for better pay but the good news is that keeping your people is largely in your control.
With the right mix of recognition, communication, shared values, motivating tasks and career advancement opportunities, your people are more likely to stick around and give back over and above what you have invested to secure them.
The truth is that while a salary increase will give a boost in positivity, this positivity will be short-lived. It’s the everyday workplace environment that determines whether one stays.
Here at RedBalloon we do a lot of different things to surprise and delight our people, and to keep them engaged and motivated.
We regularly reward our people with trimesterly team celebrations, fortnightly breakfasts and lunches, our online points program Redii where points (dollars) can be given peer-to-peer and from managers to their direct reports and end of trimester drinks (all day coffees and juices from a local café).
It’s the little things that can create the most happiness.
3. Your managers influence the destruction
Managers are best positioned to lead by example and drive a team of engaged employees.
Engaged employees are more productive, deliver higher profits and are less likely to be tempted to leave your organisation, so it makes sense to keep your managers in check and equip them with the training and resources they need to lead a highly engaged team.
At RedBalloon, every year all people leaders attend specifically designed training days to ensure their leadership skills deliver a great and consistent experience to all employees.
In addition to this, each team member has an allocated budget per financial year for them to spend on training courses, books and seminars that are relevant to their specific needs. We never stop learning.
4. Do unto others…
Don’t expect loyalty from your people if you aren’t offering them the same courtesy.
Show your employees that you respect and trust them and they will return the favour by sharing their skills and ideas, and will be more willing to commit to achieving your long-term business goals.
If you want your employees to take your business’ best interests to heart, you go first.
If you’re running a project and expecting remarkable performance, make sure you recognise that performance when it comes to ensure your people feel valued for their efforts.
A boss’s demeanour has a direct impact on the output of others. A happier workplace is a more productive workplace and the energy of the team echoes that of the leadership team.
5. Other companies are prepared to recognise your people
Almost 50 per cent of employees would leave their current job if they had the opportunity to be better recognised for their contributions elsewhere.
A dedicated recognition program can lower voluntary turnover, drive productivity and lead to repeat positive behaviours. Recognition doesn’t need to be expensive, just make sure it is frequent, specific and most importantly, personal.
“Thanks” goes a long way in showing someone they are valued.
The secret to recognising your people is to make it personal. Does Mark from IT hate public praise? Leave a thank you note on his desk. Has Sarah from marketing always wanted to go skydiving? Give her the experience of a lifetime for winning Employee of the Month.
At the end of the day, the more we know about each other, the better we can understand each other. Knowing what your people like and dislike improves communication and removes assumptions about who we are and who we aren’t.
Kristie Buchanan is the CEO of online experience retailer, RedBalloon which has been included five consecutive years in BRW’s Best Place to Work list top 50 (2008-2013). She is widely recognised for her successful employee engagement strategies.