Have you been losing good people? Does it seem like you spend as much time recruiting for new hires as you do replacing lost hires?
Investing money in a resource is not just about the salary and bonus checks. It is also about the time and effort spent in training. It’s difficult to put a number on these costs, but they do have an effect on your business. Plus, you’d rather look out for new customers or develop better products.
Let’s examine the top reasons for losing people:
Differences with the immediate manager
Fix: This is a delicate one. If you’re the immediate manager of the employee, you will never know the truth. But if you’re not the manager, you can make the employee report to someone else. If you’re the ultimate boss, it would be ideal for the employee to report to you. As a precautionary measure, watch the manager who’s losing good people too frequently. It might be better to lose that manager.
Overdependence on the employee
Fix: When you start trusting certain people, you tend to give them too much responsibility, possibly more than they can handle. Check on this proactively and take the extra load off immediately and not when they prefer to quit. Ensure that work load is distributed among all the employees based on their individual capacity.
Lack of opportunities to scale
Fix: This is a permanent problem at small businesses. Here, employees can’t be bigger than the boss and they’ve gone as high as they can. It’s a catch 22 because they’re stagnating and you’re helpless other than to offer raises. One way to solve this if they are close to indispensable (because nobody is really) is to offer them equity, albeit a small share subject to them staying on for at least 7-10 years. This is a drastic solution only to be used for key employees, like CEOs.
Job description and profile are too different
Fix: You can probably write out a clearer description the next time but retaining this employee is going to imply significant change in the profile. You may have mis-communicated. For example, your description mentions accountant for maintaining accounts and but the role involves taxation too. You need to be careful not to widen the job scope without prior consulting.
Technological advances of competitors
Fix: This is limited to high tech industries like electronics, healthcare, IT and telecommunications. Competitors can offer rare project opportunities to employees which build value on the CV and career graph. The easier way out is to associate with some educational institute in the sector for their ongoing projects and allowing employees to stay updated on sector advances. This would require some investment in time and money on your part but it helps the organization stay ahead and helps retain people.
These are indicative and naturally in a smaller organization, fixes are as prominent as problems. Take care to avoid publicizing your problems or fixes.