More than money leads to employee turnover

Those were the words of advice I heard from my boss on the day I began as a “headhunter” or executive recruiter.

No statement in business had ever surprised me more. I thought money was the whole point. I would get great job orders. I would dangle carrots in front of prospective employees. They would bite, interview and get hired. I would make a 30 percent commission on their first year’s salary. They’d make money. The employer would get a great employee. Voila! Everybody would be happy.

“I’ll prove it to you,” said my boss. “Why did you leave your last job?”

“I want to make more money.”

“Let me ask it a different way. Why did you really leave your last job?”

Reluctantly, I said, “I hated my boss.”

“Why did you leave the job before that?”

“I was sick of selling engineering books,” I mumbled. “But they did give me more money.”

“Did they offer you more money?” By this time he was positively gloating.

“Yes, yes! You made your point. People don’t stay or leave jobs just because of the money.”

Turnover costs a company anywhere from 30 percent for an hourly employee to upwards of 150 percent for a salaried employee. If, for example, you have an employee who is making $40,000, it would cost you from $12,000 to $60,000 to replace that employee. The reason for variance depends upon several things, including:

• Loss of revenue due to the employee’s absence;

• Advertising costs;

• Recruiter costs;

• Costs for outside consultants or temps;

• The amount of time and effort it takes to train a new employee;

• Time spent in interviewing and checking references; and

• Costs of background checks.

In order to keep employees happy, we must first consider that, to a certain extent, our jobs are our lives. For a typical week, the majority of five days is spent on the job. Often someone will stay in a job to make sure of insurance coverage, earned vacation, being vested and receiving retirement benefits. This is especially true in very structured organizations, i.e. government.

In times of uncertainty (war, recession, depression), people will stay in jobs they hate due to fear. Some people are just afraid to leave their jobs because of the big, bad world out there.

Let’s look at the rest of workers. If you want to keep ‘em happy down on the farm, you may wish to consider the following:

1. Money. You may be thinking, “Sinara, I thought you said people don’t leave or stay on jobs just because of money!” The key word is “just.” It is definitely a factor. Let’s say, for example, you are making $35,000 plus commission as a sales representative in the Springfield area. You discover through your networking and online research that your salary is $10,000 less than what your competitors are making. No matter how much you like your job, doubt has crept in. Why, you ask yourself, should I work at $35,000 when someone else is getting $45,000?

Solution: Pay your employees what they are worth in the marketplace. Check out www.careerbuilders.com and www.mon

ster.com to see what comparable jobs earn in this area. Go to salary calculators online such as www.salary.com. Have your human resources department or representative do a salary and compensation study for your company. You may wish to do salary adjustments where needed to bring people up to speed. If you give blanket percentage raises and these still will not bring certain staff up to market, you are going to have people who will begin thinking about leaving. When that hot ad or siren-tongued headhunter calls, look out.

2. Lack of communication. If you disseminate important company information on a “need to know” basis, you can be sure that you are sowing the seeds of dissatisfaction. The immediate result of lack of communication in an organization is a feeling of “us” vs. “them.” Employees understand that they are not high enough in the hierarchy to be told what is going on. Over time, resentment builds.

Solution: Start a company newsletter (either paper or online) that outlines coming events, promotions, new products, employee profiles and other news. If your organization is small, a weekly or monthly interactive meeting with employees will open up an interchange of ideas and communication.

3. Dissatisfaction with management. Sadly, many managers manage up but not down. You may perceive someone as a real achiever and communicator. Poor managers may be good earners, but there is a human cost, which may result in turnover. If a job is like a family, the immediate manager symbolizes a parent. If this parent is distant, cold, harsh, punishing, sarcastic, shows favoritism or never gives compliments, the employee will walk.

Solution: Listen. If an employee goes to you, other employees or to human resources, do not assume that his or her complaint is anecdotal. It may be that the complaints being aired are universal and that this person is the only one who has the nerve to come forward. This person may have been pushed farther than the others. If you don’t listen, you won’t learn. If you don’t learn, you will be telling your employees, even if inadvertently, that you don’t care.

If you look upon your business as more than just a moneymaking venture, you’ll go a long way toward retaining employees and creating a family, at least from nine to five!

Sinara O’Donnell is the principal of SinaraSpeaks, based in Springfield. She speaks nationwide on customer service, communication and humor.