Keeping your high potential talent should be a key priority for every Australian business, particularly in this day and age. But for small and medium-sized enterprises (SME), it’s absolutely critical.
Every time someone leaves, the business has to go through the process of sourcing and hiring their replacement, training them and then waiting for that new hire to make an impact to the bottom line. In short – it costs time and it costs money.
To fully understand why small and medium businesses should work on their retention strategies, it’s also important to know what drives employees to quit and move on.
Why employees leave
While many Michael Page candidates are simply looking for a new challenge, every week uninspired, demotivated and sometimes angry job seekers come to us for help with their job search, eager to find new employment.
You might not realise it, but your current staff may want to get out for several reasons. Perhaps the company culture isn’t what they thought it would be, or the job doesn’t have enough flexibility for their desired lifestyle – don’t assume it’s always about money. In particular, millennials in Australia don’t rank salary as their top priority. Read about six of the top reasons we have found why companies lose their top talent.
As a business, ask yourself: can you be absolutely certain that your staff members are happy in their current roles? Is it time to get a solid retention strategy in place?
The impacts of high staff turnover
The negative impacts of high turnover in small and medium businesses are numerous and can be devastating. Word of mouth is a powerful tool in the world of SMEs and you could be harming your chances of hiring future great talent, as well as damaging your brand reputation.
You also risk affecting the motivation of your remaining employees. When a team is constantly changing, it becomes more challenging for them to work together amid the adjustment and ‘the grass is greener on the other side’ thoughts inevitably start to sink in.
New perspectives and fresh ideas can be one of the best ways of growing your business. But this must be balanced out by a strong and well-gelled team, with experience and knowledge of your business and industry.
Nailing your employee retention strategy
We interviewed small and medium businesses all across the country in our Michael Page SME Hiring Challenges Survey and identified four major hiring challenges:
1. Hiring is expensive: 43% of SMEs consider the cost of hiring talent steep
2. Time to hire is too long: 47% thought the total average time of 35 hours spent to hire a new recruit was excessive
3. Attracting great employees is difficult: 46% of SMEs agree that they struggle to find suitable job seekers for their roles
4. Poor retention limits business growth: Over 35% of SMEs believe that their difficulty in attracting and hiring the best people is a barrier to business progression
In light of these challenges, focusing your efforts on retention is essential to get ahead in today’s competitive market.
There are numerous ways of motivating employees, including small, free work perks and longer-term staff engagement methods. However, your retention strategy must be ingrained in absolutely everything you do as a business.
This means starting from the beginning – are you selling your business and the role honestly in interviews? If you make a job sound like something it’s not, don’t be surprised when your new hire quickly becomes dissatisfied at work.
Also, think about day-to-day work-life. Are you praising someone when they’ve achieved great results? Don’t wait to give positive feedback and rewards for annual review time, instead, get in the practice of incorporating this into your daily company culture and encourage other managers to do the same.
If your best employees keep leaving you, now’s the time to do something about it.