Each time an employee leaves it costs you. Use these ideas to limit your losses.
Every time an employee walks out the door, your business loses thousands of dollars.
Think about it. You have productivity loses, advertising costs, time required for interviews and time spent training.
If a new hire decides the job isn't for him and leaves, then the process starts all over again. All of those items add up. A conservative estimate for turnover costs is one-third of a new hire's annual salary, according to the U.S. Department of
Labor. For skilled or higher paid employees, naturally turnover costs climb.
Of course, you must consider the non-monetary costs, too.
"Turnover costs extend far beyond monetary losses," says Sarah Fogleman, Kansas State University Extension agricultural economist. Turnover can hurt morale, because the employees who remain at the farm must play catch-up as they struggle to fill the same positions over and over again, as well as assist in the continuous training of new employees.
With that in mind, here are eight ideas to help limit turnover within your operation:
1. Build loyalty and a teamwork mentality.
The first step toward building employee loyalty and creating a teamwork mentality is to do things that make people feel supported by the organization, says Tom Maloney, Extension economist and human-resource management specialist at Cornell University.
How easy is it for employees in your organization to approach management, whether it is to get information or present a concern? If hurdles exist, you need to remove them in order to improve communication.
While you may not have time to meet one-on-one with every person every day, staff meetings allow employees regular access to management.
Recognize your employees' successes. It will show employees that you appreciate their work, and it provides them with a greater sense of satisfaction, says Bernie Erven, Ohio State University agricultural economist and personnel management expert.
2. Use job descriptions and evaluate performance.
Written job descriptions help you and your employees understand expectations. "People want to know what their job is and how they're doing," says Maloney.
Design jobs with employees in mind by capitalizing on employees' interests. For example, some people enjoy working with animals, while others prefer working on machinery. Try to include some of these interests in their job description.
Erven concedes that not all tasks are glamorous or fulfilling. But, by offering a variety of tasks and skills, you improve your odds of keeping employees satisfied.
3. Establish the ground rules.
Use an employee handbook to lay out the rules for your organization. The handbook should contain statements on the mission, vision and values of the business. Include compensation details, such as vacation, personal and sick days, as well as any limitations on those areas. Also, include information on business protocols and safety procedures.
"This is incredibly important, not only from a human-resource management standpoint, but also from a legal perspective," says Fogleman. "By outlining how important safety is to your business, and then highlighting the dangers of your operation, you make a statement that you value safety and are committed to maintaining a safe work environment."
4. Explain benefits.
Another thing that can help reduce turnover is helping people understand their wage and benefit package, says Maloney. For example, "many people stay or leave a job because of health insurance. It has become so expensive that people make career choices on that one benefit," he notes.
Maloney recommends that employers make a list of all benefits and assign values to them at least once a year. Then, discuss them with employees. The value adds up and employees need to understand the complete picture, stresses Maloney. Providing a breakdown of benefits with yearly W-2 statements is one sure way of getting that information out to employees. You also can include a breakdown of benefits in an employee handbook.
5. Provide training.
Few people enjoy doing something if they cannot do it well. Mediocre performance because of inadequate training will frustrate even the most enthusiastic employee.
Remember that proper training goes beyond the first few days on the job. Fogleman points out that it takes 30 days for a new employee to be fully oriented into the business, then it's 365 days before an employee is fully trained within that particular work environment.
6. Challenge employees.
"Employees want to become more than they are today," says Maloney. That means delegating tasks and giving people the opportunity to take on new assignments.
Give your employees a chance to become true professionals. "Professionals have many things in common – not the least of which is the fact that they view their occupations as professions, not just the means to a paycheck. If you want employees who will stick around, take initiative and weather the business' ups and downs, you need to try to make every employee within your operation see their job as a profession." Fogelman says.
When job openings occur, consider employees within the organization first. Promoting from within sends a signal that employees have career advancement opportunities, says Erven.
7. Provide non-monetary benefits.
In order to meet employees' needs you must design a compensation package that offers more than just cash wages. Provide things that will meet an employee's psychological needs, such as job security, flexible hours and opportunities for growth, recognition and friendship.
"Successful compensation packages are total-reward systems, containing non-monetary, direct and indirect elements all based on the employer's objectives and the employee's needs," says Fogleman.
8. Provide equitable compensation.
Jobs should be valued on their contribution made to the business, says Erven. If the farrowing manager, pressure washer and tractor driver positions have different values to the business, those positions should have different wage schedules.
You also should evaluate how the compensation package you offer stacks up against other nearby producers and businesses.
You don't have to implement all of these ideas at once. Instead, use them as a blueprint to create a work environment where employees will want to stay and thrive.
By Kim Watson, freelance writer