This is the last post in our People Series. If you are joining the party late, the previous posts talked about who to hire to grow your business, how to write a job description and interview effectively, and how to develop those awesome people you hired. The last topic we’ll cover is how to make sure those people want to stick around.
Employee turnover is one of the most painful and costly aspects of running a small business. Every time someone walks out the door you not only lose all the training and experience invested, but you can also incur soft costs upwards of 150% of the annual salary of that role. That is time and money you can’t afford to lose. So let’s avoid that by following the 3 steps below to help make sure that amazing hire sticks with you.
1. Create clear expectations of what success looks and how it is measured
We’ve written a whole other post on metrics which speaks to sales metrics and business management, but sometimes the metrics are not always sales numbers. In a production role, it could be orders shipped on time, in an accounting role it could be a percentage of receivables under 60 days, in a marketing role it could be customer engagement. The metrics are specific to the role, but the important thing is taking time to define them. There is nothing that sets a new employee up for failure more than not knowing what they are being measured on.
2. Provide regular feedback that is both positive and constructive
Employees thrive on regular feedback – everyone loves a pat on the back. Ensure there are times where you give only positive feedback – notice the little things and highlight them so the person knows what they are doing well. When you do need to give constructive feedback, focus on what they should be doing rather than focus on what they are not doing. For example, rather than saying “you are not responding to customer’s requests quickly enough”, instead say “my expectation is that you respond to customers within x hours of a request coming in”.
Feedback should happen naturally and spontaneously throughout the year. But it’s a good idea to do a formal review once a year so you can sit down and talk about what they can be working on to grow. It’s a good idea to do what is called a 360 degree feedback. This involves getting input from the people the employee works with so you can give a balanced perspective in the review.
3. Frequently review development goals
In a formal review, define what is required for the individual to progress to the next level, what a realistic time frame is for that, and what the plan is to support them getting there. Frequent feedback throughout the year should refer back to that plan and how they are progressing towards it.
Bottom line when retaining the employees you’ve hired: over-communicate with both the new hire as well as existing team members. Spell out what success looks like and give them frequent feedback on how they’re doing. You can save our Sample 360 Feedback to use or create your own.