At last, ‘Independence Day: Resurgence’, the rather unimaginatively named sequel to ‘Independence Day,’ is hitting cinema screens across the country.
I must admit that I loved the first film with its have-a-go heroes fighting valiantly against frankly ludicrous odds and it got me to thinking: whether you are saving a planet or protecting your business, having the right people on board is key to the success of any undertaking.
Confident people with the right skills, a willingness to take responsibility and a positive attitude towards teamwork are a huge asset to any business.
If you are lucky, you’ll already have these people on board, but don’t think your work stops there. If you want them to stay with your business, you’ll have to understand what makes them motivated and engaged. Fail to do this and you could end up losing some of your strongest assets.
Of course, unlike ‘Independence Day’ this is not likely to put you at risk of total world annihilation. That said, it can leave your business struggling to cope with the fallout for months to come. Here’s why.
The costs that just keep coming
Losing a key employee is costly for two main reasons. Firstly, there is the financial cost of finding and training a new employee. Secondly, there is the problem of the new recruit being less productive than their predecessor whilst getting up to speed.
Whilst many businesses might just take this on the chin and consider it a normal part of employment, they might think differently if they understood the true scale of the problem.
Firstly, they are going to need to find £30,000. That, according to a report by Oxford Economics, is what it costs the average business to replace a member of staff.
The initial part of this cost is for recruitment, which according to the report comes in on average at a cost of £5,433. Of course, this will vary from business to business, but even removing the cost of hiring temporary employees to fill the gap, the average business will spend the best part of £2,000 on advertising, recruitment agencies, interview time and HR involvement.
That might sound a lot, but unfortunately this cost is just the tip of the iceberg or, if we are going to stick to ‘Independence Day’ allusions, the prow of the mother-ship.
A much more costly problem is the significant drop in output that occurs whilst the new employee gets to grips with the role, which the Oxford Economics report put at £25,181 per employee.
That is because, on average, it takes new employees 28 weeks to reach optimum productivity. Whilst this slowdown period does reduce somewhat for SMEs, the report found that even microbusinesses experience a 12-week lag in productivity, which could have a more serious impact on business stability than the 28 weeks for large businesses.
Bearing this in mind, it is easy to see why retaining good people is so critical to business performance. So what can you do to ensure your ‘hero’ employees stay on board?
Keeping hold of your top performers
It’s certainly not the easiest time to address employee churn. As we move further and further out of recession, the chances of losing your staff are on the increase.
That is according to a survey conducted by the Institute of Leadership and Management, which found that more than a third of UK workers were looking to leave their job in 2015; three times the numbers of 2013, when only 13% of employees planned to move.
However, whilst you might think that offering good job security, a competitive salary and a healthy benefits package will leave you free from risk, none of these is a guarantee of keeping your best people on board. Instead, employers need to work closely with their employees to find out what makes them tick or turn off.
Fortunately, the ILM survey gives some useful insights into why people look to move on. By far the biggest reason given by respondents was a sense of stagnating in their current role, with 59% saying they were looking for a better opportunity to progress. 56% said they were looking for a better salary, whilst 50% said they needed a more interesting role. What is more, a quarter said they planned to leave because they felt underappreciated.
These reasons indicate that many workers see having a challenging role, being appreciated and getting a pay packet to reflect their efforts as key to them being loyal to their company. As such, employers need to understand this and make sure they address those needs on an ongoing basis.
This isn’t just important from an employee relations point of view. It is also critical in terms of your business success.
This was underlined recently in a Gallup study into the relationship between employee engagement and business performance. Businesses with the highest levels of employee engagement were 21% more productive and 22% more profitable than those with the lowest levels of employee engagement. Interestingly, the businesses with the highest levels of engagement also had significantly lower levels of employee turnover.
These findings are proof positive that keeping your employees engaged is key to your business performance.
How to find out what your employees want
Finding out what your employees like and dislike about their current role isn’t hard. It is something you can get to the bottom of with a regular conversation, whether in a formal performance review or a more casual chat.
However, a conversation in itself isn’t enough. Make sure you document what was discussed and act upon it. If you want help with managing and recording these discussions, click here to try a free demonstration of Myhrtoolkit’s HR appraisal software.
Unfortunately, we won’t be able to help you with the measures you then need to take to keep your staff on board, but even starting a conversation can make a big difference.
It may seem daunting but don’t worry: I doubt they will say they aren’t happy because they expected to be fighting aliens. If they do, then they probably need to move on.
Written by Jon Curtis
Jon Curtis is Managing Director at myhrtoolkit and previously an employment solicitor. He co-founded myhrtoolkit in 2005 and become full-time MD in 2018.