Updated: Mar 7, 2020
If you are the primary manager of a small business which suffers from a high turnover rate, there is but one place to look. The mirror.
People quit their bosses, not their jobs.
Like all adages bantered about or posted on social media, there are exceptions to the rule, so to speak. Yet this rule, in my opinion, holds the most truth. Nothing ruins the atmosphere in a workplace more than a terrible boss. Nothing.
What Is Your Turnover Rate?
Glad you asked.
In 2019 we hired and trained four employees. Same thing for 2018. We are truly a small business, with a total staff of only fourteen. A turnover of 4 out of 14 over a year may seem a bit high, but not when the majority of our employee departures are anticipated.
In four years we’ve had five people leave unexpectedly. Two were fired. The three others quit over frustration with me or my policies. All other departures were planned due to graduation from school or other future commitments.
High turnover rates hurt businesses, especially small businesses. Training new employees costs time and money. When we train a new employee payroll is elevated for weeks. It has a real impact on revenue. I can not imagine absorbing this extra payroll over the course of a year. Yet this is what many small businesses do.
In addition to the financial strain, a high turnover rate makes it difficult to build a strong team. It creates an atmosphere of uncertainty. The cohesiveness of your team is consistently interrupted. It can literally drag a small business into the ground.
Two of the things a business needs to do in order to enjoy a low turnover of employees:
Retain strong leaders who care (I prefer to promote from within)
Create and/or maintain a culture which treats your employees as people and not numbers
It Begins With The Interview
This might imply we have a magical filter via targeted questions to ensure we only bring the best onto our team. Hardly. Most of the people we interview end up on our team.
How do we manage to bring great people to our team?
Before I answer this question, I will let you in on something. Ready? Most people applying for a job want to perform well. Seriously. I’m not kidding. Most people actually want to impress their bosses.
“Today, I’m going to do my best to screw up everything I can,” said no one ever.
Okay, maybe not ever, but you get the point. People, for the most part, want to perform well at their place of employment. Finding talent is easy. If you own a business, it’s literally banging on your door weekly asking for employment. Keeping talent is the real challenge.
Most managers will decide within a few minutes of initial introduction whether you are a fit for their company. I believe this to be true. I know it is true for me. When a person approaches us for a job, I begin asking what I term filter questions, or pre-screening questions.
What year in school are you?
What is your availability?
How many hours per week are you looking for?
What I’m actually determining is whether you are going to make it to our interview process.
We place prospective employees through three interviews. Even if there is only one person asking. Even if I’m already certain we are hiring this person. Our interview process is not designed to be a filter. It is designed to introduce you to our culture.
There have been cases where a person was denied employment as a result of these interviews. It is rare.
Most of our employees remain with us in excess of two years, some for over three years. Two have been with us nearly four years. Twelve of our employees are those dreaded Millennials. The ones who are supposedly unreliable and devoid of a work ethic.
Your Workplace Culture Matters
The Coffee Shelf might be the toughest job to get among restaurants within a 15-mile radius. I kind of made that number up; it could be further out. If this is true, it is not due to selectivity. Nor is it because you have to know someone to get a job. Of our recent four hires, only one was previously friends with some of our employees.
It’s a tough job to get because no one leaves. The last two high school students who graduated requested to remain employed while attending college. They remain a part of our team.
It’s the internal environment of The Coffee Shelf, our culture, which has resulted in great retention rates. A large part of this is my belief in placing employees first, above everything else. If you have not, please consider reading my three part series starting with article one here.
A great workplace culture is a momentum builder. While I believe there is plenty of talent available in our area, we end up interviewing the most persistent. People talk. Word gets around. When someone asks for a job I will respond with something similar to, “we are not hiring at this time, but some of our people are due to graduate and move on. Please come back in May or June.”
Those who remain persistent end up working at The Coffee Shelf. We have numerous employees who can speak to this, who have been with us for years. They came and asked almost weekly, over a period of months.
Again, to emphasize my belief, it all comes down to how a company values its employees. There are some very important things all companies should do for their employees if talent retention is truly a focus.
Train and teach in order to give each person an opportunity to move on to greater things in life. Even at the risk they will leave your company. By doing this you are establishing credibility. People care about actions, not promises. When they learn the company cares, they will not want to leave.
Say yes. Yes to more responsibility. Yes to promotion when possible. Find a way to say yes to anything which demonstrates loyalty, by the person asking, and from you.
If they want to leave and then return, say yes. I’ve seen corporations do this for their people. It is no surprise these large companies remain within the top ten of best places to work.
I’ll finish with a quick story.
One of the best people I hired, after only three months at The Coffee Shelf, approached me regarding an opportunity to go to Hawaii and work for free at a coffee shop, in support of an International Charity, Surf The Nations. She asked if it was possible to continue working at The Coffee Shelf upon her return. She would be gone four months.
I said yes before she could finish the request. Two years later she was promoted to Assistant Manager at The Coffee Shelf. She remains a part of our team. Someday she’ll leave to do greater things. Hopefully not for a while.