Turnover is expensive. According to Employee Benefit News, when an employee chooses to leave a company, it costs the business 33 percent of that former employee’s annual salary to find a replacement. To put this in perspective, if an employee is earning $80,000 annually, it will cost the business about $26,400, on average, to find another suitable candidate. The costs mount up in recruiting fees, potential compensation changes and lost productivity while the position remains open, and while the new employee is being trained.
Leadership consultant Marcel Schwantes believes that turnover can be reduced if employees feel they have meaningful work, a purpose and look forward to arriving at work each day, which are characteristics of many entrepreneurs. In a recent article, Schwantes outlined six ways that companies can foster this entrepreneurial spirit in their employees in order reduce turnover. We’ll share these insights in this issue of Promotional Consultant Today.
Encourage independent thinking. Empower employees to make their own decisions by offering encouragement and support, and simplifying the decision-making process and required approvals.
Cut down on bureaucracy. Unnecessary policies stemming from bureaucracy stifles the ability for employees to think and act like business owners. Enlist a cross-functional team to figure out how to keep bureaucracy at a minimum.
Allow employees the opportunity to grow. When employees come up with ideas that are outside of their specific responsibilities, connect them with the right teams and allow them to bring these ideas to fruition. This can improve employee engagement, expand employee skills and ultimately improve morale. This can also provide employees with an added sense of accomplishment.
Reward entrepreneurial thinking. When employees share ideas that make a significant difference to customer experience or the bottom line, make sure they are rewarded and recognized for their contributions. Positive reinforcement will encourage the employee to continue contributing.
Provide access to information. If employees are being asked to think and act like business owners, they require the same kind of information that a business owner would need. This includes a clear understanding of the bigger picture, strategic goals, and management’s expectations.
Provide the freedom to ask. Grant employees a voice that can be nurtured and not criticized and foster a culture where any question can be asked, even the tough ones, building a collaborative, inclusive and trusting culture.
Source: Marcel Schwantes is a speaker, leadership coach and consultant, and syndicated columnist drawing over a million readers per month worldwide to his thought-leadership.
