Just as poor performers can drain valuable time, energy and money from your business, top performers can add all of these things in spades. Keeping these employees challenged, motivated, happy, committed and loyal to your company for as long as possible is invaluable to your continued success and growth. Many of you may consider performance management as having strong appraisal systems in place, where review meetings are conducted once or twice a year, with a remuneration review thrown in the mix. What the recent ‘GFC’ has shown many employers is that even those staff who are fantastic and performing well, may not be in line for a pay increase of any substance, organisations quite simply in many cases can’t afford it. Companies who rely on this as the sole method of rewarding employees may find retaining them in the current (or any) market to be a tough ask. Employee turnover can be disruptive, expensive and have a major impact on staff morale and your organisations reputation in the marketplace. It is estimated that the cost of replacing a staff member ranges anywhere from one years salary, to ten times that, with an average estimate of two and a half times the salary of the individual. This cost includes more than just money and time spent on sourcing, screening, hiring and training staff, but incorporates lost customers, damage to business reputation and lost productivity during the short staffed or ‘skilling up’ periods. This ‘skilling up’ period where new staff are learning the position, products, services and customers can cause the business to lose growth momentum and become ‘static’ thus effecting future growth plans and ultimately profitability.
It is estimated that the cost of replacing a staff member ranges anywhere from one years salary, to ten times that, with an average estimate of two and a half times the salary of the individual.
Studies show that employees leave their positions for many reasons, but the lack of strategic and annual pay increases is not usually one at the top of the list. In fact most employees would rather receive regular and unexpected smaller displays of gratitude and rewards for achieving results. Employees want positive attention and recognition from their employer, with the ability to make decisions as well as the opportunity to grow and develop. So we know that poor retention can cost a business, but can good retention benefit a business financially? Put simply – yes! Staff retention is the best way to benefit financially from employees you’ve recruited, hired and trained and offers the highest return on investment of any HR initiative.
Following are some tips and hints to retaining your top performers:
1) The tried and tested, but still important tools:
- Regular performance reviews.
- Offer rewards and incentives for good performance such as commissions for exceeding targets, a ‘prize’ such as a dinner out for two for whoever exceeds their targets by a certain amount each month / quarter
- Have a structured career development plan so they understand what’s required to achieve development.
- Staff discounts on company products
There are the additional benefits which are often offered by the big end of town such as:
- Paid or subsidised Private Health Insurance
- Gym memberships
- Company Car and / or Fuel card
- Extra Superannuation contributions
- Bonuses
2) The more unique, and cost effective ideas:
- Unexpected rewards / gifts. These rewards don’t have to cost a lot of money; to many the recognition is far more valuable than the monetary worth of the gift. Examples include movie tickets, chocolates or a bunch of flowers for employees who have gone above and beyond. Organising a team lunch, BBQ or morning teas to reward the whole team.
- Giving someone an early mark or a day off without notice. Events and activities such as a Melbourne Cup Lunch, Christmas and Easter Functions
- Flexible hours (great for non customer roles or jobs that can be done outside standard business hours)
- Pay for accommodation for a weekend away for them and their family
- Rostered days off, I have a client who gives their staff 1 day off / month, something no one else in their staff poor industry does, it’s a great drawcard.
- Summer hours, a company we deal with offer their staff through Summer the ability to come in 30 minutes early every day over the season, and leave at 2pm on a Friday. It costs them nothing and the staff love it!
