While a company’s products and services are key drivers in success, even more important are the employees that work for and represent the company on a daily basis. They are the ones that can truly make, or break, a business. In today’s work climate, with unemployment rates at historic lows in many states, businesses are struggling to keep their employees, and this is hurting their company, their profits, and their culture. Below are a few of the top mistakes companies are making that lead to poor employee retention, and what you can do to make sure you don’t fall victim to them.
Lack of clearly defined place and role within the company
One of the biggest mistakes companies make, especially when hiring new employees, is to be vague about the job description, particularly related to specific responsibilities that the new employee will be accountable for. Whether this is on purpose (it does happen, we’re sorry to say) or on accident, the disconnect an employee feels between expectation and reality is a leading cause in their quick exit from a job. It can also lead to dissatisfaction among other employees, when the help and resource they thought they were getting is not what it was “supposed to be.” Sometimes companies simply do not know where to assign the new hire, and end up having them move around trying to find that right fit. This creates a feeling of unsettledness for the new employee. The simple fix? Be honest, and sometimes that means being honest with yourself. If the job you need is one that requires employees to wear different hats, with different responsibilities, then let them know, and make a plan with them for how you can help support them. This, when done up front, helps strengthen the bond between employee and management and it increases employee commitment, lessening the risk that the new hire will jump ship.
Inadequate investment in company culture
Equally as important as making sure a new employee has a clear sense and feeling for what their job will entail, is making them feel welcome and a part of the company/family when they first start. Small things, like a welcome packet or name plate on their desk, can instantly make an employee feel a warm sense of community, and help break through the nerves that come with starting at a new position or company. It is also important to invest in the company culture for ALL employees, not just the new ones. A strong company culture, and connection between employees, has been proven to be a major factor in employee retention. People are less likely to leave when they have friends at work and feel a sense of loyalty to the company. So, plan events, ask your employees what sort of perks they want and invest in your employee culture. Your return on investment for focusing on company culture will be well worth the cost.
Lack of honesty and transparency
A big mistake many companies make is thinking they are doing employees a favor by keeping the “important decisions” to the upper level management only. Recent research has proven this notion to be false. The lack of transparency and honesty with employees leads to a deep mistrust and creates a negative spiral of other effects. By excluding employees in updates and objectives, companies also lose out on the possibility of great ideas, and the chance to build and strengthen employee-management bonds. This is not to say that employees should, or need to, know every single detail of a company’s operations, but being open and honest about changes, sales goals, and future company outlook will lead to better communication, trust, and employee retention.
The three examples above are just some of the many mistakes companies are making that lead to poor employee retention. As you think about these three, what other issues might be impacting your business? Take the time to look internally, to ask former employees or ones that are stellar performers why they left/stayed. And encourage honest answers with no punishment. As strong business leaders, it is important to have a pulse on the daily ins and outs of your employees, so you can hire stellar new ones, and keep growing the excellent employee base you already have.