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Human Resources Small businesses vulnerable to losing staff

One of the hottest issues in business today is keeping employees.

Besides the cost of replacing someone, a company’s productivity declines during the interim until a replacement is brought up to speed. Today, it’s even a problem finding a replacement in the first place.

Small businesses are particularly vulnerable to the cost and productivity impacts of losing employees. They don’t have the depth of staff to absorb the departing employee’s workload and rarely have a human resources department to search for and hire a replacement.

The solution, more pressing in today’s market than ever before, is to retain employees.

How does a business retain employees? By blending traditional and innovative approaches to creating loyalty.


– It’s Not Your Father’s Workplace

At least five trends make retention a topic of primary importance to businesses of all sizes in all industries.

We are in an era of virtually zero unemployment in San Diego , at around 3 percent. Good for employees, not good for employers. It’s hard to find people.

At the same time, people take a much more short-term view of employment opportunities today than in the past. Employees expect to have several careers and do not count on long-term employment with any one company.

A new view of work at all levels is the ad hoc, project-based approach. Ad hoc teams are brought together to solve a problem that requires diverse disciplines and abilities and the team is disassembled after the problem is solved.

People have a new priority today , balance. With more and more two-income families, time is more important than money. So workers want flextime, four-day work weeks, longer vacations and the ability to telecommute. Employees are imposing these demands for balance on employers.

Finally, in a world where the growth of information surpasses anything previous generations could have imagined, there is a desire for continual challenge, professional and personal growth, and contribution. Employees are less inclined to be OK with the status quo and more likely to be seeking change.

Given these trends, employers have to work harder than ever to create a workplace that retains employees who have more and more attractive opportunities elsewhere. What’s an employer to do?


– Blending Traditional, Innovative Approaches

Make sure compensation is attractive. An obvious starting point is to focus on compensation packages. Employers have no choice but to provide attractive salaries and, in many cases, regular raises.

The San Diego Employer’s Association salary survey 2000 found that local merit increases outpaced national increases, clearly a response to the tight employment market.

Retention will require that employers continue to push the envelope on the package, including nontraditional benefits such as stock purchase plans, paid sabbaticals, company-provided day care and more.

Share success. Employees are vested in a business’ success to the extent the employers share its success. Bonuses are more important and offered more often. The San Diego Employer’s Association’s salary survey found a dramatic 65 percent increase in the number of employers offering incentive plans from 1999 to 2000.

Celebrate success. In a go-go world, employers too often keep up a feverish pace and don’t take time to sit back and enjoy success with employees. Make it a point to build celebrations into your workplace. When you hit certain milestones, celebrate. It makes a huge difference to employees to feel they’ve accomplished something, instead of just aiming at a continually raised bar.

Manage individuals individually. While this is not a new concept, it is more important now than ever. Understand each employee’s needs and desires; help craft individual career paths for them; and listen, listen, listen. Employers will lose the employees who don’t feel they get personal attention and keep most of the ones who do.

Educate everyone always. Employers who think training and education are simply preparing employees for better jobs elsewhere are taking the short view.

First of all, it will enhance the contributions of your employees today. Second, it becomes a retention factor in its own right. Employees remain with companies that help them grow.

Focus on competency. Employees know which of their colleagues are performing and which are not. If you reward the former, it’s a positive. If you keep the latter, it’s a negative. People want to work in a business where competence is recognized and rewarded, and incompetence recognized and addressed.

Offer flexibility. The employer who can provide the most flexible options, in terms of tracks, directions and timing, will retain the most employees. Different people want to move at different paces and the successful employer will recognize and accommodate that. If you can offer different tracks in your business, do so. Allow employees to change tracks rather than have to go to another job to do so.

How do you do this? One way is to institutionalize what we used to call cross-training. Offer employees the opportunity to take temporary assignments in new areas of operations and/or responsibility to see if they resonate with something new.

Mind the culture. Corporate culture is a huge consideration in employee retention. To keep employees, be mindful of the company’s vision and make sure it resonates with them. Encourage a participatory environment where everyone’s input is valued and an open-door policy is the rule, not the periodic exception.


– Maintaining An Open Mind

It may be easier said than done, but employers today must keep an open mind to the wishes and needs of employees.

If your business is relocating, find out where employees would like to be located. You may be surprised to find out they want to be in a downtown high-rise, or in a Victorian house in a quiet neighborhood.

Encourage the social activities your employees like. To the extent you facilitate bonding between employees, you are creating reasons for them to stay.

Use outside consultants on occasion to find out what your employees think and want, and how to provide it.

If you think you can’t afford that, or some of these other solutions, ask yourself if you can afford to lose anyone. In today’s employment market, you can’t afford not to focus on retention.

Sczempka Jr. is president of the San Diego Employer’s Association, a not-for-profit association that provides human resources expertise, training, programs, consulting and other services.

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