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How to Retain Your Best Employees

You know the cliches about hard-nosed capitalists. You’re the tough one who can weather any storm. Everyone else is afraid of risk, but you have an appetite for it. You go out into the world and bring back deals that create jobs. You’re a captain of industry.

So why is it that when a key employee resigns unexpectedly, you feel like a broken-hearted teenager?

None of the hard-nosed stuff even occurs to you. In that moment, it’s all emotions. You’ve been jilted. You made heroic sacrifices to create that job in the first place. You made heroic sacrifices to keep it alive through thick and thin. You took a risk on this person, giving him an opportunity that let him stretch and grow professionally and personally.

You served this person. And you remember – vividly – the one time he thanked you for all you had done. How could it have come to this?

The answer is simpler than you may expect, and if you embrace it, you can virtually eliminate the chances that you’ll be jilted again.

Being Jilted Costs You

Employee retention has become a huge challenge across the entire globe. The average tenure at Google, which consistently wins praise as one of the best employers in the world, is one year. And Google has a greater need to retain intellectual property and proprietary know-how than most companies. If they can’t do better than a year, how can you?

The job market itself certainly works against you. These days, when anyone gets even slightly upset with their boss or their job, they look at any one of several online job forums to see if the grass is greener somewhere else. If they use Monster.com, one of the largest, they might be fed this headline: Why You Should Never Stay in the Same Job for More Than Four Years.

Entrepreneurs typically finger Millennials as being the sort who’d fall for a pitch like that. But according to the Bureau of Labor Statistics in the U.S., Baby Boomers were just as bad. In their thirty years between the ages of 18 and 48, Boomers held about twelve jobs, which means they switched every 2.5 years.

In today’s hyperactive workforce, it might seem like there’s just nothing you can do about this. But as a hard-nosed capitalist, you need to. The Society for Human Resources Management (SHRM) estimates that the moment you lose a salaried employee, you incur a cost equal to nine months of employing that person – just to get back to where you were the day before he quit.

Employee churn can decimate your profitability and your ability to grow and expand. So what’s the solution?

Employment as Romance

Go back to feeling jilted for a moment. What went wrong? In romance, the problem is almost always communication. More precisely, it’s the quality and the content of that communication.

You remember being thanked. You probably play that memory in your mind to boost your confidence. The same is true for your employees. You want them to value and admire all you’ve done for them. And they want you to value and admire all they’ve done for you.

It’s human nature, and you can use it to engage your workforce. An example from the financial crisis makes this clear. The St. Louis-based manufacturing company Barry-Wehmiller lost 30% of its orders at the onset. What company could possibly weather a blow like that? From the outside looking in, it would seem that management had no choice but to lay off people to cut costs. But that’s not what they did. Instead, the company’s leadership required everyone, including themselves, to take unpaid leave. Rather than lay off some people completely, everyone took a smaller hit. “Better that all of us suffer a little,” the CEO announced, “than any of us suffer a lot.”

Morale skyrocketed. Everyone felt admired. Everyone felt valued. They banded together to cut costs, improve quality, and, especially, to fawn over their remaining customers.

It turns out that when Barry-Wehmiller’s leaders did the right thing, they also did the hard-nosed thing, because, as Forbes writes, “happy employees make happy customers.” If that sounds like the formula for growth and expansion, add to it the fact that happy employees don’t quit, either. If they’re happy, they’ll turn your customers into advocates. If they feel valued and admired, you won’t need to deal with that nine-month loss. Combine the two, and you’ll compound your gains.

Three Magic Words

So how do you harness this force? Not surprisingly, it all comes down to communication.

Gallup’s recent management study found that “Managers account for at least 70% of the variance in employee engagement scores across business units.” Does that mean it’s your fault you were jilted? To a degree, the answer has to be “yes.” But Gallup also identified techniques that can help prevent it from happening again. They found that managers leading highly engaged teams did three things extremely well:

  1. They communicated clear work priorities and goals.
  2. They valued their employee’s innate strengths and harnessed them to achieve those goals.
  3. They were open and approachable, so the employee could easily communicate with them.

“When employees know and use their strengths,” Gallup concluded, “they are more engaged, have higher performance and are less likely to leave their company.”

It’s never been easier to communicate with your workforce than it is today. With the right system in place, you and your managers can execute on all three of those practices in real-time and with minimal effort.

First, give your people goals that play to their strengths. Then, don’t ping them when there’s a problem. Instead, when they win, give them the business equivalent of three magic words: “Great job - thanks!” You’ll never be jilted again.