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Becoming an Employee-Centered Organization

The Cost of Losing Employees
A 2008 article in HR Management magazine noted that replacing a worker costs on average 100% to 125% of an employee’s annual salary. If an employee earned $75,000 a year, replacing that person sets the employer back $75,000 to $100,000, once you calculate the executive recruiter fees and the cost of advertising and training. Moreover, the employer loses productivity and often suffers a decline in morale as colleagues wonder why they are staying and whether the grass is more appealing elsewhere. And yet many organizations still ignore employee retention.

Becoming an Employee-Centered Organization
You can cut turnover and retain a much higher percentage of your employees (you are always going to lose some of them) by concentrating on four basic steps:

Step 1: Recognize, Recognize, Recognize
It’s that simple. More than salary increases, which can only be given every so often and have a way of fading fast, recognizing employees for their efforts goes a long way to keeping them. Everyone wants to feel special and valued. The larger the organization, the more the employee can get lost, becoming another cog in the organization. But when the manager or leader stands up at the meeting and says, “Mary Difali’s efforts helped us gain the new contract,” or, “Sam Smith’s hard work helped boost our customer service numbers,” what’s the first thing that Mary or Sam says to their spouse that night? “My manager recognized me for my efforts. And that made me feel special and valued.”

Step 2: Avoid Micromanaging
If there’s one thing that most employees despise, it’s being micromanaged. Having a boss look over your shoulder says mistrust. Most people don’t want to stay at a job where the boss has no confidence in them, doesn’t trust them, and waits for them to make a mistake. The opposite of that is trusting your employees and challenging and supporting them.

Step 3: See Things from the Employee’s Viewpoint
Most managers view their employees as a resource. What kind of work can I get out of them? How can the employee help meet deadlines? How can I maximize the worth of this employee? All those questions are valid. But in order to retain your employees, you need to see matters from their viewpoint.

Think of your employee as your trusted friend. You always want to support your friends, and yet at times, you must be honest with them and explain what they’ve done wrong. It’s the same with your employees. As long as they know you respect them, are on their side, and can provide them with challenging opportunities that stretch their talents, you will retain them.

Help your employees to grow. Assist employees in reaching their long-term goals. Stretch their talents. Update their skills. Invite talented staff members to conferences to expand their network and learn about new trends. Ask yourself: How can I help my employees reach their goals while moving the organization forward? How can I get the most out of my employees and also make sure they get what they want?

Step 4: Specialize in Employee Relations
Just as Nordstrom has dedicated itself to customer service as its signature brand, why can’t your organization focus on employee satisfaction as its competitive edge? Imagine how your organization would prosper and change if you heightened retention, kept the best and brightest employees, and curtailed turnover? And imagine the gains if your company became known as the best in your field for treating employees and started attracting the top marketers, fin¬anciers, designers, and salespeople. Imagine the ramifications.

Most companies know that keeping an existing customer costs much less than spending valuable marketing dollars finding new customers. Why can’t companies spend as much time making their employees happy and focusing on retaining them as they do on recruiting them? And if businesses viewed satisfying employees as they do meeting the needs of customers, retention levels would rise! It is absolutely senseless to spend hundreds of thousands of dollars on recruiting fees, conferences, and recruitment videos and podcasts to find the right people and then ignore them and let many of them walk out the door within the first year.

I recommend organizations spend as much energy and dollars on retaining employees as they do on recruiting them. If organizations spent fifty cents of every dollar on recruiting and the equivalent sum on retaining employees, they’d keep those employees longer. When retention is given the same respect as recruiting, the odds are strong that you will hold on to a much higher percentage of your staff.

© 2009 Johnny C. Taylor, Jr. and Gary M. Stern.  Excerpted by permission of the publisher, from The Trouble with HR: An Insider’s Guide to Finding and Keeping the Best People, published by AMACOM, a division of American Management Association.
www.amacombooks.org

About the Author(s)

Johnny C. Taylor, Jr. and Gary M. Stern Johnny C. Taylor, Jr., is CEO of Rushmore Drive, a new IAC/InterActive Corp Internet business.  Gary M. Stern is a New York City-based writer.  They are coauthors of The Trouble with HR: An Insider’s Guide to Finding and Keeping the Best People (AMACOM, 2009).