Dr Bev Smallwood

Articles Library: Employee Leadership

We Just Can't Keep Good People

Dear Dr. Bev,

We just can’t keep good people! About the time we get them hired, they go to the competition for a raise of fifty cents an hour. We tried some things like adding a few benefits and giving the opportunity for more overtime hours. But the truth is, even this doesn’t seem to be decreasing our rate of turnover. To make matters worse, we hear a large new company is coming to our area, and they’ll be hiring thousands of people.

Is there no such thing as employee loyalty anymore? Any ideas about what we can do to stop the talent drain?

Dr. Bev's Response

You are definitely not alone in this problem. The current employment rate, at 3 to 4 per cent, is the lowest in almost forty years. That means employees have options/ and if they don’t like something, or when greener pastures beckon them, they leave.

When you lose a good employee, studies indicate that it costs from 1 ½ to 2 times the person’s yearly salary to replace them and get a new person up to speed. Consider the hidden and not-so-hidden costs involved…advertising and other recruitment, background checks, screening and interviewing time, orienting and training the new person, loss of intellectual capital in the head of an experienced person, mistakes made by inexperienced people, disruption of teamwork, service problems that can result in lost customers. No wonder you’re frustrated!

First, let me caution you that you cannot cure the problem by simply throwing money at it. In fact, studies on commitment show that employees who are with you simply because of money or benefits lack “emotional commitment” they need. Their work records are marked with high absenteeism, low productivity, and poor teamwork with supervisors and co-workers.

What it really takes to create loyalty is a high-value workplace. Think about your external customers. They base their buying decisions on their peception of value in the exchange. Briefly stated, Value = Perceived Benefits/Perceived Costs of the Benefits, compared to other known alternatives.

Your internal customers (employees) also calculate value. The employees use their own personal equations of “benefits” and “costs” to answer the key question, “Is it worth it?”

Employees will become and/or remain committed, productive, and loyal to your organization as long as they perceive a positive ratio of benefits to costs (i.e., value). In the mind of the employee, your workplace must provide personally important tangible and emotional rewards, and those benefits must outweigh the physical/emotional requirements, difficulties, and disappointments that collectively comprise the “cost.” Employee loyalty further requires that the current working situation must be perceived to be superior to any known realistic employment alternative.

So where do you start in building a high-value workplace that is “magnetic”…one that attracts and keeps talented people? I suggest three major steps.

1. Know your employees.

Study (ask!) your employees to discover how they define “a great place to work”, as well as what factors stress them. This goes beyond employee satisfaction, digging deeper to find out the factors that either attract or repel employees and prospective employees.

For example, here are some of the most frequent “benefits” and “costs” gleaned from participants in our seminars across the country.

Benefits. Most frequently mentioned are:

  • praise and recognition for a job well done;
  • opportunities for input and involvement in decisions that affect them;
  • money;
  • ability to balance work and family;
  • job security (Does that still exist?);
  • access to needed information;
  • flexibility in time schedules and work locations;
  • the feeling of being a part of a team;
  • accomplishment of goals;
  • sense of challenge, and;
  • opportunity to learn, grow, and advance in the job.

Costs. Motivation robbers are such negative workplace experiences as:

  • the stress of nonstop change;
  • dealing with customer complaints and problems;
  • feelings of helplessness and powerlessness;
  • interpersonal conflicts and power struggles;
  • incompetent managers;
  • overly critical supervisors;
  • lack of information or training necessary to accomplish tasks;
  • disappointments in people after personal investments in their development;
  • lack of trust in management or peers;
  • frustrations with system problems or delays;
  • unrealistic time deadlines;
  • and last, but not least, inadequate monetary compensation.

2. Involve team members in action planning.

Actively involve employees in the generation of ideas and problem solving about areas that need improvement. In itself, this process builds loyalty, for it gives the message, “Your opinion matters.”

3. Follow through on priority issues, and measure the results.

Don’t make the mistake of asking employees what they think, then failing to act on anything they say. Doing this actually hurts your relationship with employees rather than helping. Select the issues that are having the greatest impact on your workforce, and invest in improving those. This investment will pay high dividends.

Systematically track your results by looking at organizational data like turnover, as well as by ongoing verbal communication with employees and periodic opinion surveys.

One More Thing.

Should you be worried about the big new employer coming into town?

No…if your employees:

  • are emotionally committed to your company’s values;
  • feel they are doing work that really matters;
  • feel valued because you listen to them and involve them;
  • feel that you treat them as “whole persons” rather than just “hired hands”;
  • experience your managers as positive role models who really care about them;
  • have plenty of opportunities to learn and grow.

Yes, maybe you should worry if… you have to admit that your intentions to create such a workplace have exceeded your accomplishments.

It’s not too late. I strongly recommend you start now to create daily emotional connections with your employees. (I call these “magnetic moments”.)

If your company can maintain higher employee value than its competitors, you will be less vulnerable to competitive pressures to take those employees away. As a result, you’ll reap greater rewards from your employee development and training efforts. Less often, you’ll witness talented and skilled employees slipping through your fingers and into the hands of your competitors, inside and outside your industry.

I don’t believe that loyalty is really dead. Give employees a great place to work, and they’ll do just that…with enthusiasm!

Dr. Bev Smallwood is a psychologist and professional speaker who is the author of “This Wasn’t Supposed to Happen to Me.” Visit her website, www.DrBevSmallwood.com; or contact Bev at 601.264.0890 or by email, Bev@DrBevSmallwood.com. Also connect with Bev on Twitter, Facebook, Linkedin, and her blogs, Shrink Rap and New Morning Devotionals.

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