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Published on January 17, 2000

Learn to manage for employee retention

As a result of our strong economy, unemployment today is at a record low. There are "Hiring Now" signs on almost every fast food joint you drive by and "Now Accepting Applications" on the door of an abundance of businesses in just about every sector of industry. The "Employment" section of the Sunday paper is chock full of advertisements for open positions and "headhunters" have never had it so good.

As a result of the "downsizing, rightsizing or capsizing" of the 1990s, employee loyalty is down, too. Perhaps you've lost valued salespeople or technicians to competitors or to other industries. Now you're asking yourself, "How do I keep from losing the great employees I still have?"

Employee turnover is very expensive for any employer. It costs big bucks to recruit new people, run them through the gamut of physicals, background checks and drug screenings, and then provide them with training.

During the training period, errors result in poor quality and perhaps even lost customers. Smart tire dealers know that to reduce the costs of high turnover and recruitment, they need to manage for retention.

The first question anyone should ask in regard to improving employee retention is: "What do people want in a job today?" Most employers would guess good pay, good benefits—including health insurance and a 401(k) plan—and opportunity for advancement.

However, according to human resource surveys that have been conducted, these issues were not even in the top 10 most commonly cited. The first was open communication. Employees want to have a voice in the business, or at least want management to listen to their points of view. Lack of a voice in the workplace often leads to unionization.

Second in importance to employees was the job's affect on family and personal life. Employees today, especially Generation X-ers, want to balance work and family life. They're looking for time off when they have to address personal problems or events or schedule their work around their family's requirements.

The third-biggest factor frequently cited by employees concerned the nature of their work. People today want meaningful and challenging work. This was followed by: management quality, individual supervisor, control over work content, gaining new skills (training), job security, co-worker quality and job location. (Benefits ranked 13th, and salary and wages ranked 16th on the list.)

Most likely, the employees you lost told you they were leaving because they could earn more somewhere else. However, the most common reasons for leaving a company given by people who were surveyed were: 1) "The job didn't feel good"; 2) "I won't be missed"; 3) "No opportunity for growth"; 4) "No support"; and 5) "Compensation."

However, people always say they're leaving for more money because it is non-confrontational—it burns no bridges—and supervisors always think money and benefits are more important than employees do.

So, how do you manage for employee retention? What do you do to keep the employee talent you now have and reduce the costs of turnover? Well, let's look at addressing the top three factors that people look for in a job. The first one is open communication.

Being listened to and heard by others is a sign of being respected and valued. There are many ways you can formally listen to your employees and involve them in the management of your company.

Meetings are a good place to start. You may call them staff meetings, safety meetings, breakfast/ lunch meetings or town meetings. You can structure these meetings so that employees have an opportunity to bring up issues, state problems, share ideas and make suggestions concerning the work they do and the issues they face in their work.

Some dealers have had great success in designating an employee at each meeting to tell those in attendance about his or her job, how it impacts the company and ways they've found to improve their work. This seems to open other employees up and good discussions take place.

Author Tom Peters is a big advocate of MBWA—management by wandering around. This goes hand-in-hand with working alongside employees and having one-on-one discussions. By working side-by-side with salespeople, technicians or retread shop employees, managers can experience firsthand many of the concerns these workers confront and reduce class distinctions between management and staff employees.

Employees who see you get out from behind that desk and talk and work with them feel you are interested in what they're doing and in what they think. One person I know makes it a point to have a 15-minute dialogue with one employee every day.

This is long enough to address issues and gets past the non-speak of: "How are you?" and "How's the family?"

Many companies use a formal suggestion system. However, if every suggestion is not responded to, the system loses its effectiveness. To be successful, every suggestion must be acted upon—even if it is turned down. All employees must be given factual reasons as to why their suggestion was accepted or rejected.

Failure to do this quickly results in no one submitting suggestions. Other formal methods of tapping into your employees are through employee task forces or focus groups, committees, attitude surveys and exit interviews.

A balance between work and family life may well be the most sought after employee "benefit" of the millennium. Generation X-ers aren't as impressed with money as with a balanced lifestyle.

Amazingly enough, according to a poll conducted by Robert Half International Inc., two out of three American workers would reduce their hours and compensation by an average of 21 percent for more family or personal time.

With this in mind, what can you do to address this issue with your employees?

First, acknowledge non-work priorities. Every employee is different and each has priorities that probably are more important than work. You need to respond to the needs of your employees by providing greater opportunities for balance.

Employees develop loyalty to organizations that respect them as individuals. Offer work scheduling options. This includes flexible schedules for meeting family needs, including part-time options, job sharing, telecommuting and phased and rehearsal retirement.

These modified schedules increase the employee's appreciation for the job and loyalty to the company.

Most people want to belong to something larger than themselves. Having work with meaning—to make a difference in the work that we do—is critical to employees today.

How can tire dealers offer work with meaning to their employees? Consider these options:

Communicate how an individual's job contributes to the whole. Explain what happens if the job is not done or not done right and how the employee will be missed if he or she isn't there;

Provide pride and ownership in every employee's job. This can be accomplished with training, which also enhances loyalty and commitment and reduces turnover; then,

Have employees sign their work. This can be on the work order, on the repair patch, a report or anywhere else you or your customers will see their names.

Giving back to the community also aids in stabilizing a company's workforce. Many companies are finding that a strong program of volunteerism can be a bonus for both recruiting and retaining employees.

A sizable percentage of candidates considering a company as a prospective employer view its work in the community as a factor in their decision to apply for or accept a job. Employees are proud to say, "That's the company I work for," when their company is cited for its charitable work in the community.

As you can see, none of these solutions is a quick fix to employee turnover. The solutions are more about how you treat employees than about gimmicks, games and prizes.

They require a change in the tire dealer's attitudes and behavior toward the company's salespeople, technicians and administrative employees. However, once implemented, all employees will find they no longer have to look for greener pastures.

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