Do you struggle to attract and retain great employees?
You’re not alone.
It’s reported that up to 20% of staff turnover happens within a new recruit’s first 45 days at the company - and with the organisational cost of this turnover stated to be between 100% and 300% of the lost employee’s salary, putting together a great team isn’t just time-consuming, it’s costly, too.
The solution? To find out why great staff leave.
Good people who know their value may well end up leaving you for bigger and better things. It’s up to you to do what’s in your power to make them stay. Here, Vistage speakers share the key factors that affect retention.
For David, there are seven factors that come into play when defining or transforming the culture of a business, namely:
- Hiring for attitude, training for skill. As David says, the way you hire can have a huge impact on your company culture. A new hire can have either a positive or a negative impact on the company and its culture - you need to be sure that it’s the former, and that’s more likely if you hire a positive newcomer than an experienced but embittered veteran.
- Communicate, communicate, communicate. Sporadic emails detailing company news aren’t enough. You need to communicate with your employees in a regular, inspiring and consistent way. If you use email, include pictures and headlines and ensure the tone is not generic corporatese, but suitable for the culture you’re trying to encourage. Face-to-face communication, though, is always more powerful and inspiring
- .The power of listening. Listening, says David, is the highest form of respect you can give to a person. And, in his view, the highest performing company cultures adopt regular mechanics for listening to their employees and taking on board their ideas.
- Style of leadership and management. Your leadership style must match your company values - and should be reviewed regularly. Remember, your employees will be watching your behaviour all the time, and how you lead will affect your company’s culture.
- Remove your underperformers and push your talent. Often referred to collectively as “performance management”, these activities should be simultaneous. Feed back to those who are underperforming and work out how best to progress - and meanwhile, have a plan in place to advance the careers of your true talent.
- Recognition. Don’t underestimate the importance of saying thank you to people. Recognising individuals’ performance will shape their happiness, loyalty and productivity for a long time.
- Have fun and create a sense of community. Great organisations, says David, have fun. Your employees need to enjoy being at work, the work they are doing, and spending time with the people they are working with.
For David, it’s important to set a culture of high performance that the right staff will buy into. Achieve that, and you’ll find it easier to hire and retain great employees, as well as creating a meaningful work environment.
Interview process/recruitment strategy
It’s one thing to recruit the best...but what does that mean in reality? The answer: a solid strategy for hiring and interviewing.
HR expert and speaker Hunter Lott stresses the importance of knowing exactly what you’re looking for - and of focusing not just on technical competence, but on behaviour.
He uses the example of Google: a brand known for hiring incredible talent. After running analytics on their interview and recruitment data, they recognised that exam results and level of education had no impact on whether a new recruit turned out to be a great hire.
- You may like: Small business thinking for big business growth
Their most successful employees had two core competencies in common: adaptability, and a willingness to learn. Google’s redesigned interview process allows candidates to demonstrate these qualities, giving the company a better chance of hiring the right people.
The lesson here is to ask yourself - what is your hiring all about? Are you hiring for something that will create a competitive edge, are you using the right process, are you getting great people - or are you desperate to fill holes and compromising as a result? To get it right, consider using psychometric testing: an approach that has resulted in great success for Vistage member Claire Edmunds.
With 30 years of corporate experience, and having run 16 different businesses, Vistage speaker Balaji Krishnamurthy was recognised by Time Magazine as one of 25 Global Business Influentials.
“At the core of any company”, he says, “is leadership. Leadership actually has two meanings, both of which are pertinent”. Defined as either “a group of leaders” or “style of leading, both definitions should be built on a foundation of intentionality.
There are many different styles of leadership (two of which we've covered in more detail here) - the style you adopt is down to you. “I’m not prescribing the style of leadership you should have”, says Balaji, “but choose that style. Be able to say the kind of leader you are”.
This defined leadership style will filter down to your whole organisation: your company story, your vision statement, your external brand, your internal culture. Poor leadership will result in a company with no story, no clear vision, a poor external brand image and employees who show up purely for a pay cheque.
Great leadership, on the other hand, will enable you to create a company story that is exciting. “By a company story”, he says, “I do not mean a history story. What is the heart of your company? Why do your employees get up to go to work? Companies that have a story? It shows.”
Your company’s story is a personal narrative that people believe and want to talk about. Great leadership will allow you to define a brand vision that you and your employees find exciting, and that is seen as achievable. And great leadership will also bolster your company's reputation - both externally, helping you to win clients, and internally, helping you to attract and retain great people who can keep your company performing strongly.
Lack of employee engagement
Employee engagement and communication coach Donald Rheem helps his clients to understand employee engagement at an emotional level. And engagement, he says, falls into four categories.
The actively disengaged, says Donald, “are the employees who quit but just haven’t told you. They live on the dark side of the moon - they’re the walking zombies in your organisation. And they get really dangerous if they happen to be managers”. They account for around 5-15% of the average company, and, on average, will do half a day’s work for every full day’s pay.
The somewhat disengaged make up 25-35% of employees and will do two days’ work for three days’ pay, while the somewhat engaged (20-35% of your employees, on average) will do a decent day’s work for a decent day’s pay.
What companies should aspire to, though, is increasing the number of actively engaged employees, who, on average, do one and a half days’ work for one day’s pay. They’re not working twelve-hour days, “These are the people”, says Donald, “who are the heart and soul of almost everything good in your culture. These are the people that are positive almost every day, they go above and beyond, they exceed expectations - and most of them are doing it just because that’s the way they’re hardwired”.
The actively engaged are 300% more productive than the actively disengaged, even when paid the same. While money can be used to attract people and to anchor them so you retain them, it’s not this money, says Donald, that determines their daily behaviour in the workplace.
Disengaged behaviour can be incredibly toxic to any company. As Donald says, “Innovation and creativity decline in cultures where there are low levels of engagement. Higher engagement leads to an increase.” But that’s not all. The more disengaged your employees are, the more corrosive they will be to your leadership; the more they will work to actively disengage their co-workers. In wishing to avoid conflict, many leaders will keep these disengaged employees in their roles - a surefire way to destroy the faith of other employees in your leadership.
There are five key steps, says Donald, to improving overall engagement levels:
- Understand the issue. Look at the science behind disengagement, and pinpoint where the negativity is coming from.
- Measure current engagement levels. Use a tool to set a benchmark of employee engagement.
- Align. Define your core company values, demonstrate what success looks like, set clear and achievable expectations, and offer frequent and specific recognition.
- Build relationships. Get everyone within the organisation on board with your new engagement tools.
- Measure again. Take these steps, then re-measure using the same tool as no.2 the following year, and so forth. This trend line will give you a predictive index of your business’ health and growth - and will also correlated with customer experience, productivity and profitability, which can all be linked to your employee engagement levels.
Full-time speaker, author, trainer (and former sports coach) Steve Head is a firm believer that employee wellbeing drives performance. And for him, promoting employee engagement can improve workplace wellbeing - and, in turn, performance.
The core of this is self-awareness. A shift in mood from positive to negative in a single person can severely impact on the performance of the team as a whole, but it’s more than just that. Self talk can also affect the way we feel. As Steve says, “critical self talk will bring you down, constructive positive talk will bring you back up”.
The same applies, says Steve, to the workplace environment as a whole. While it’s important to sit down and work out why problems at work have happened and how they can be resolved and avoided in the future, it’s equally important to celebrate the positives. For Steve, it’s as simple as saying, “Last week, you made a decision that had a significant impact on this business in a positive way - I’d like to find out more about how you did that”. This approach can both lift an employee and provide constructive feedback for the company as a whole, allowing you to learn from the best experiences and continue them throughout the organisation.
“Deal with critical issues - never let the negatives go”, says Steve. But focus on the good stuff. Interrogate success more than you’ve ever done before. I’ve never come across a corporate yet that has a mandatory policy to interrogate why it worked”.
Promoting knowledge (knowing what you want to do), skill (the ability to do it) and determination and drive (the desire to want to do it) as the pillars of confidence throughout the business will help employees to succeed and keep them motivated. And to have a positive impact on performance, Steve uses the equation performance = potential - interference. Remove both external and internal interferences blocking your path and add a touch of potential, and you’ll not only have improved performance, but improved employee engagement, too.
Good people don’t stick around - or so the myth goes. If you want that to change, you need to give them a reason to stay - and it’s not all about money. By defining a clear company culture, honing your leadership skills, recruiting in the right way and making employee engagement and wellbeing priorities within your organisation, you’ll create and retain a team full of A players who are loyal, happy and productive, and who will propel your business forward.
Join Vistage and you’ll have access to over 30 keynote conferences each year - and much more besides. Find out more here.