HR for SMEs is a blog created in the beginning of 2018 with the idea of sharing knowledge. To bring to Small and medium enterprises owners the knowledge of a HR Manager.
Some companies are able to keep their employees for decades with a low salary or a without a full benefits scheme, and despite these conditions, their employee turnover rate it’s close to zero. Some of these incredible companies don’t even try to calculate their employee turnover, and you can be sure that they don’t have a retention strategy plan. Why? Because they are not worried about it. You are not usually worried about problems you don’t seem to have.
How do they do it? What is the key in most of the occasions for their employees to stay with them?
Despite of how these small and medium organisations have higher rates on job satisfaction, it is important to increase your retention rate that you understand the main reasons why employees leave a company.
- Pull factors: When even though they are happy, they decide that they will look for something better, higher salary, more benefits, more convenient hours. Sometimes is only about working with a company with fantastic employer branding or recognition in the industry.
- Push factors: These are factors coming from a discomfort in the current company. Clashes with colleagues, feeling of unfairness, disliking the organisational culture. They leave, not because they are convinced of where they are going, but because they don’t want to be at their current organisation.
- Unavoidable turnover: We would include resignations that have nothing to do with work, voluntary and involuntary reasons, like retirement, illness, incapacities of the employee or relatives who need care, parents who need another work where they could combine work and childcare, etc…
- Involuntary turnover: these are situations where the employee doesn’t have a wish to leave the company, but they are forced to do it. Situations like redundancies, etc… Even though the company is the one making this decission, it still has a cost of recruitment to find a new person, says Taylor.
Those unavoidable, it is not worth it to review how to improve or retain employees when there is an inconvenience that force them to change or leave their work. For those employees leaving within the first 2 bullet points, the push and pull factors, it is important that you carry out exit interviews so we can analyse as much as possible and avoid those problems for future employees.
Exit interviews will usually be honest conversations that will help you improving employee engagement in the future. When their salary depends on their line manager, they will tend to avoid criticising. However, you would be surprised how many of those employees leave because their line manager is not doing their work properly or is a horrible manager.
Sit with them, if you have a good relationship, and go through their reasons to leave. Understand their motives to leave, but also ask about the things that you could improve as a company in the future. They will all have their point of view, and you obviously don’t have to take it all, but is always a good learning experience.
If you are lucky enough to get good feedback from them, make sure you correct all the avoidable issues in the future, like… “I didn’t know what I had to do until I had been here for 3 weeks” or “My colleagues didn’t know I was coming and when I came on the first day, I had no computer”. These examples may sound exaggerated, but it has happened 🙂 and listening to them may solve you bigger problems.
Of those who leave within the first year, a wide percentage could have been avoided by planning their first 90 days and making sure they adapt to the role, and facilitating the process by training programmes or by creating the perfect onboarding. If you want to read more about this, we have written several posts about Onboarding that you can find here with check lists on how to run a perfect onboarding strategy or some bad experiences on some cases shared with us.
When creating a company you have to assume that people will come and go. If your problem relies on the culture, make sure you analyse this in depth, understand what your objectives are, what is the current culture and how would you like it to change it. If there are simple things like changing the culture of working late, make sure that those staying late will not be benefited in anyway for the fact of staying late just for the sake of it.
In some cases, you may want to change a cold and distant environment into a friendlier one. don’t force people to become friends, but it is always good to do things like engagement activities, or team building exercises from time to time, that would create that sense of family or align culture that most call me back I looking for. However, it is important that you understand, that if someone felt on the first week that the team didn’t want them there, or that their role is not completely define, it will probably not matter if you go out for beers every Friday.
They need to be integrated in the team, and that’s an important part of the objectives of the Onboarding process. For the new employee to have a better understanding of how the company works, written and non written policies, some quality time with most of the team members that will be interacting with them on regular basis.
This practices has proven to reduce the turnover, increase the employee engagement, and therefore, reduce the turnover costs.