Ask just about anyone who manages a business that hires hourly wage employees (especially those involved in retail, food service or non-union labor jobs) what their biggest challenge is, and they’ll likely tell you that their main concern is keeping good employees on the job and with the company.
According to research conducted by People Report, restaurant managers in particular have huge employee turnover rates to contend with. On average, fine dining restaurants in the U.S. average a 66% annual employee turnover rate, while fast food restaurants have been averaging a whopping 145% turnover rate. Altogether, these staff changes result in billions of dollars of lost revenue for the food service industry alone.
Every time an employee leaves a business, all of the time and money invested in these workers goes out the door with them. This is especially true in the service industries or in any business that has spent time researching and planning specific training and process practices. And aside from the time and money that goes out the door when employees leave, the business is left “short staffed” and has to start the recruiting process over and over again.
For this reason, it’s not just hourly employees that have a high turnover rate; certain businesses may have a high turnover rate among managers due to frustration and burn out!
Given how costly turnover can be, it’s important to look at some of the things that managers can do to help prevent employee departures. In the worst cases, serious issues concerning how the business is being run on a day-to-day basis can lead to a “snowball effect” that leaves managers facing a two-pronged, difficult situation – a mass exodus of employees and the major loss of revenue that comes from the decreased sales that can be associated with understaffing.
While these statistics and the issues behind them are important to understand, your primary focus as a manager needs to be implementing strategies that will help reduce turnover rates. Here are three easy ways to do this:
Build relationships with staff members
Business managers should be seen by the employees as human beings who care about the success and welfare of their employees. Granted, it’s a fine line to walk for the manager, but it’s worth it when you consider the employee retention benefits that come from building relationships with everyone on the team.
Managers who are “task masters” and who make employees feel like they’re slaves to the company damage the relationships needed to minimize employee turnover. But, at the same time, managers shouldn’t portray themselves as “everyone’s buddy” either, as some separation between employee and manager is necessary to ensure an orderly workplace.
Managers can, however, show interest in their employee’s well being by learning about their families, interests and whatever it is that excites them when they’re away from the job. When employees feel that their managers care about them, they’ll be more likely to return this good will and do a better job while they’re on the clock.
Reward employees with perks
We already know that great employees can be hard to find – and sometimes even harder to keep. Whenever managers encounter employees that show they’re going above and beyond the minimum expectations of their job descriptions, it’s a good idea to give them plenty of praise – and to give that praise in front of other workers.
Other small gestures – such as awarding a gift card for reaching a specific sales goal or a number of days without an on-the-job accident – shows that the manager really does care about the well-being of his employees. Sometimes, something as simple as a “pat on the back” is exactly what an employee needs to enjoy his job more and remain with the company longer.
Offer pay raises as a reward for hard work and commitment
While last week’s article on, “What Employees Really Want from Their Managers” revealed that incentives don’t only need to come in the form of financial reward. But in some cases, raises and benefit increases may be the only way to keep your best team members.
Within every business, there are a number of people who work hard every day, show up on time for their shifts and expect to be well-compensated for their efforts. And while these employees may seem dedicated to your company, the reality is that they often have their ear to ground for jobs that pay more than their current wages.
This might not have anything to do with employer/employee relations. In fact, these employees may truly like the person or people they’re working for. But the current state of business economics dictates that most hourly jobs don’t pay a lot of money – especially when you consider taking money out of a person’s paycheck for taxes, unemployment insurance and any other necessary deductions. As a result, the need to secure a higher income can easily trump employer loyalty, leading to turnover.
Managers can keep these employees where they are by offering pay raise incentives and following through on these promises. More specifically, managers can set tangible goals or milestones that every employee in the business should be capable of attaining. Setting “pay raise goals” for employees that are just high enough out of reach to make staff members work hard – while, at the same time, making them reasonable enough for all workers to attain – can go a long way towards keeping good employees from leaving and minimizing overall turnover costs.3 Easy Ways to Minimize Employee Turnover Chad Halvorson