Want to make your accountant smile this year?

There’s a lot of talk about “people being the highest single cost for most organizations” and “the high cost of employee turnover,” but what can you do about it? It is true human resources are very expensive; but they are also your organization’s greatest asset. People are the company’s key to creating profits-or losses. So, it’s a balancing act, and you have an important question to answer:

How do you get the most value out of the money you spend on employees? How do you:

• Save money, without falling into the trap of quick-fixes that are more expensive down the road?
• Increase efficiency within your project teams, making them progressively more valuable?
• Prevent mistakes, chaos, and employee disengagement that lead to lost customers and lost profits?
• Invest in your company’s human resources in meaningful ways that inspire employee engagement?

One of the most cost-effective things you can do is reduce employee turnover. A 2006 Gallup study put the cost of replacing an entry-level worker at 75% of starting salary. An executive’s replacement can easily be 300% of salary. Remember that balancing act I mentioned? The one where you need to decrease employment expenses and increase the value of your teams? Reducing employee turnover affects both sides of the fulcrum.

The Win-Win of Reduced Employee Turnover

(Your accountant is going to like this.)

Let’s break it down in more detail.

So how do you reduce employee turnover? There are lots of things you could try, but how do you know what will work? Should you cut out overtime? Establish a bonus plan for key employees? Hang a suggestion box? Hold on! Leaping into action before you’ve done your homework is the most expensive, time-consuming thing you can do. Just because a particular action worked for another company doesn’t mean it will work for yours-every company has a unique set of conditions that must be taken into account before they can determine the best solution for their organization.

Let’s take this one step at a time – it will save you a lot of money and frustration. Before you implement a new program or project, you need to:

1. Clarify your goals.
2. Learn what stands in the way of meeting your goals.
3. Determine the best action to take so you can meet your goals.

Then you can implement a cost-effective action plan that will create the results you seek.

That’s where I come in. I bridge the gap between your goals and knowing the best action to take. For more than 30 years, I’ve been helping companies just like yours improve profitability by reducing employee turnover. I can help you too, and you’ll be surprised at how easy and affordable I make it.

It’s about communication. Your employees know why your company experiences turnover and they likely have a good idea about what needs changed-even if they don’t have the management skills to change it. That’s not a problem; you have the management expertise. Now all you need is to learn what is helping and what is hindering your employees while they do their work.

Here’s a real-world example of what I mean: A fast-growing medium size package delivery company operating out of five hubs in the Northwestern U.S. was alarmed over high turnover. The survey results were unmistakable: the vast majority of dissatisfaction lay in one hub. Not all five-just one. The one with the highest turnover. Surprisingly, the most dissatisfied group in that hub was the managers, who complained of too little staffing, too little training, and too little leadership. The lost solution: a management orientation program extending over the first six months of hire. Turnover, as planned, plummeted.

Your best communication tool is a well-designed employee survey. Surveys allow you to go directly to the people with the answers and ask questions they recognize as relevant and worth answering. Employees want to keep management informed-it’s in their interest to do so. They just need a pipeline.

Most efforts to understand what a workforce is experiencing are either impractical or ineffective:

• Executive or CEO announcements are seen as politics, not communication.
• Management-by-walking-around often filters out too much.
• One-to-one meetings between employer and employee are time consuming.
• Suggestion boxes are familiar, but often viewed as goofy.
• Newsletters inform, but can’t open things up for discussion.

But a well-designed employee survey opens up a conversation so you can learn:

• Who is having the most problems
• Who is most likely to leave
• Where the pain is greatest
• How long things have been deteriorating

And, when you survey again in a year…

• If the steps you’ve taken have made things better or worse-both financially and from your staff’s point of view.

One more thing your accountant is going to like: a well-designed employee survey pays for itself. Remember the statistics about replacing employees? It’s about 75% of starting salary to replace and entry-level worker 300% of salary to replace an executive. The math is simple: 300% of the salary of one $150,000 executive is $450,000. Save a few entry-level workers or one executive-along with the experience and knowledge they bring to your team-and you’ve more than paid for your annual employee surveys. These saving increase every year as your survey design team becomes more efficient and the cost of the survey program drops.

What will doing nothing achieve? If you haven’t recently asked your employees what’s most on their minds, it’s impossible to say. Sorry, but it’s as simple as that.

However, if you have read this far, you’re probably already dissatisfied by the amount of money you’re spending on employee turnover. You and I need to visit.

Call 503-241-0595 today to start learning how you can:

• Reduce staff turnover, fire up line managers, identify your best and brightest for leadership, and add to your bottom line.
• Find hidden trouble spots lurking in your organization and figure out what to do about them before they cause real problems
• Start improving profitability relatively quickly and easily.

Your initial consultation is free.