The 2 Largest Employee Expenses in Business that CEO’s, CFO’s and Even Business Owners Don’t Consider!
I’ll cut right to the chase. #1 Disengaged employees and #2 Employee Turnover
Give me four minutes of your time to explain and possibly change the face of your business and it’s bottom line!
First of all, you must know the answers to these questions.
- What is your employee retention rate? If you don’t know, find out, today. If you’re tracking turnover stop today. Rather, track retention, to ensure retention. If the focus is on retaining employees, you are much more likely to retain them!
- What do you do to ensure your employees are accessing their strengths, doing what they do best every day, and are completely engaged? If you can’t answer this question immediately, with certainty and excitement start asking yourself this today and every day going forward.
Because, how long an employee stays and how productive they are while they are there is a direct result of their relationship with their leader.
If you’re like most businesses that I’ve worked with during my 20 plus year career, talent acquisition and employee (talent) retention is a huge challenge. If you think employees are leaving for pay think again.
Have you had an employee leave you recently or do you continuously have employees that leave while you’re caught in the continuous daunting process of filling roles in your business?
Here’s your challenge. It’s easy to see. Grab a mirror. What do you see? You will see the challenge or the real issue. It’s you, or the person responsible for hiring, acquiring talent for your organization. Remember, how long a person stays at a company and how productive they are while they are there is a direct reflection of their relationship with their leader.
I’d be willing to bet, having never even met you, that I know what you’re thinking. “That’s not true.” “They left because………”
“The other company offered them more money.” “They just didn’t have the skills required for the job.”
“They weren’t a good team player.” “Good help is hard to find in my business.” “People don’t want to work these days.” “People just don’t like change.” Trust me. I’ve heard them all. So, sure, you can come up with a million excuses. Or you can make a change. Right now, today, realize that you are completely responsible for finding the right talent for the roles within your organization. Decide that you are responsible for matching talent with roles, for developing the strengths of your team, for managing them to outstanding performance.
Therefore, if you are the manager or organization with a high turnover the truth is you, (or the person responsible for hiring) didn’t select the right person with the right strengths for the role. Again, although I’ve never met you, I’d venture a guess and say that you/they focused on skill set. The average employer and employee gorge themselves on skill set while never truly uncovering or even understanding what their natural abilities are.
So, in this war for talent, how do you find the right person with the natural talents required for the role and keep them?
First of all, commit to transformation across your entire organization.
Most of all, dig deep. Be all in. What do you have to lose? What you’re doing now isn’t working anyway.
Create a culture of coaching, not a culture“employee benefits”.
Also, focus on a purpose driven workplace, rather than a paycheck driven workplace.
Foster an environment of engagement champions and leaders. Coach them, develop them, engage them in their work, their purpose.
Uncover, allow every employee to access and help them develop their strengths.
Set excellence as the bar.
Be willing to recast. If your employee doesn’t have the talent to be successful in their role, recast them in a new role that aligns with their talents. That new role may be within your organization or it may be with a different organization.
Let the actively disengaged employees go. You are doing a disservice to them, your business, and your customers by continuing to allow them to be miserable.
Look, you, your organization, all organizations have to adapt to the needs of today’s workforce or you, they will quickly find themselves struggling to attract and keep talent and ultimately customers.
So how do disengaged employees and employee turnover so drastically impact your bottom line?
Per Gallup Polls, 51% of employees are not engaged.
Therefore, they are just there. 16% of all employees are actively disengaged. They are miserable. One actively disengaged employee costs YOUR organization four times the salary of a fully engaged employee. Think of one of your greatest employees, the one who’s job seems to come naturally to them. They love their job! Multiply their salary by four, then multiply that number by 16% of the number of employees in your business. I’d venture another guess and say that number may be higher for your business. In my experience about 35% of the employees we’ve polled have been actively disengaged. Do the math.
Multiply their salary by four, then multiply that number by 16% of the number of employees in your business. I’d venture another guess and say that number may be higher for your business. In my experience about 35% of the employees we’ve polled have been actively disengaged. What it costing you? Thousands? Tens of thousands? Hundreds of thousands?
The competitor wins.
You’ve spent time training this employee. Your employee has spent time developing relationships with your clients. They’ve been at your organization long enough to hone their skills. However, their strengths were not accessed. They were not encouraged to do what they do best. They were disengaged and looking for an opportunity elsewhere. Trust me again when I say they were looking while working for you.
71% of the American workforce is actively looking for other opportunities. Now that they’ve honed their skills, developed relationships with your customers, they are ready to leave. Where are they going to go? Directly to your competitor. They are going to take their skills and talents with them. Your competitor may have embraced the new workforce demands. Look out if they have! That’s not all. People quit people. People also work with people, not institutions. You better count on your customers, at least a portion of them, going along with your employee to the competitor.
Turnover is budget killer.
In my experience, the average time frame for an employee to provide a return on your investment is about 18 months. Don’t believe me? Think about your hiring process. Countless hours and dollars are spent by your internal team. While they are marketing for the position, interviewing people, reviewing resumes, and piling through those lists of skills the clock is ticking. How many hours are spent in the on-boarding process for a new employee? And how many hours are spent training your new employee?
Furthermore, what about your current team? How many of your current teams’ hours are spent showing the new guy or girl the law of the land? What about the learning curve? How long is the learning curve for the new employee to become the expert in his or her role? All, only to have them leave you. So, the next time you hire based on skill set alone be prepared to budget, or spend, one and a half times your employee’s annual income and benefits for naught, or for your competition.
Here’s the bottom line about your bottom line.
Consequently, the greatest determining factor in the four major business outcomes is your team. Let’s face it. If you have a great product or service with large profit margins and low overhead but if your employees are miserable, spreading the word, undermining your purpose, searching for other work while you pay them, being actively disengaged, you may not be around to offer your product or service. Pay attention to margins, cash-flow, and projections, but if you really want to increase your bottom line pay attention to and develop your employees! Are you ready to develop your team? Optimum Impact is changing the face of the business world with innovative, engaging, and results oriented TEL training!