Does Your Company Have an Employee Retention Problem?

In my travels and my work with many different companies, I have often found that some managers turn a blind eye to how often there is employee turnover in their firm.  Some executives think that a change in employees is to be expected, just as at the end of the football season, the team’s players will look different when some of the stars are out with injuries.

As a CEO, you are familiar with the scenario: when you lose a valued employee, one your business has invested thousands in training it will cost a great deal of time and money to recruit a replacement and get him up to speed.  Your business will prosper if you can hold onto your best employees.

Have you been ignoring the warning signs that indicate that your employees are dissatisfied and are looking for new jobs?  Some of these signals are:

• Employees stop asking questions in meetings and generally “shut down.”
• Employees don’t take their vacations because they are saving the holiday time to “cash out” when they resign.
• Employees are asking about COBRA and your retirement plans, out of the blue.

Other signals that some of your employees may be tuning out from the excitement of being at work are poor attendance or working “bare minimum hours,” rather than putting effort towards their performance.  Sometimes the workforce becomes lethargic, and workers don’t demonstrate a sense of urgency. They don’t smile, don’t seem to be having fun, and don’t chat with other workers at the water cooler.

If you hear from managers that some employees are spending a lot of time on the phone making personal calls, texting, or logging onto Facebook – these are also warning signs.

Sometimes when certain employees receive constructive criticism from their managers they don’t seem to care – they don’t even respond to negative feedback but just shrug their shoulders. Why?  They have one foot out the door.

Your personnel staff may report that the time required to fill open positions is increasing because applicants hear via the grapevine that your company is not a great place to work.  Word on the street is that many key employees are looking for new jobs.

If you recognize any of these symptoms, take action before it’s too late. You may have an employee retention problem. Having a revolving door for employees will cost your company a lot of money. A study by the Society for Human Resource Management (SHRM) estimated that the cost to replace a single $8 per hour employee is $3,500.  The numbers increase, of course, the higher the level of the employee.  A typical ballpark cost of losing entry-level employees amounts to 30 to 50 percent of their annual salaries.

The number shoots up to 150 percent of the salary for mid-level employees, and up to 400 percent for high-level, specialized employees.  The cost to replace just one supervisor whose average annual pay is $40,000 would be $50,000.  If your company loses five supervisors at this level per year, you’d be down $250,000 in bottom-line costs.  If your supervisors make more than $40,000,  well, you do the math.

As the CEO, you should also keep in mind that negativity can be contagious—unfortunately, it is often more contagious that a positive attitude.  If you have just a few disengaged, unhappy employees in your company, they can often cause operational and performance issues to spread to other co-workers.

So if you find that employee disengagement is a problem, try to nip the problem in the bud.

Take Care of Your Employees

For most mid-sized companies, everything hinges on leadership. As the company leader, you’re at the start of a chain reaction that ultimately leads to your success or failure.  So what can you do?  You can go back to the basics, and remember the importance of taking care of your employees.

Leaders who run successful businesses have employees who are genuinely committed to their jobs and are more productive.  Investing in your people is what builds cooperation, trust, engagement, innovation, organizational learning, and yes: productivity.  As we have said in previous blogs, engaged or committed employees usually take fewer sick days and generate an average of 43 percent more revenue, according to Gallup.

Here are some suggestions to help you, as a leader, create a high-performing work environment, and turn those disengaged employees into satisfied, productive, engaged workers:

• Ask the right questions.  Determine whether your employees understand the goals of the company and their specific roles in achieving those objectives..
• Set clear expectations. Once employees know what they need to do, they still can benefit from leadership direction on how to do it.  If your employees are not receiving the support they need to complete their jobs successfully; your company is wasting time and money.
• Provide motivation. Make sure your employees stay motivated and inspired. Take the time to understand each team and employee, and assess their motivation to work on a particular project.
• Look for blocks.  You may be unaware that there are organizational bottlenecks or obstacles that your employees are facing.  Try to eliminate unnecessary paperwork, unproductive meetings, administration burdens, and tools or systems that create more problems than they solve. Again, remember, “Ask the right questions.”  Let your employees tell you if they feel blocked by certain obstacles.

The best way to address your employee retention problem is to transform disengaged employees into engaged employees.  It’s not impossible: we are all human, and we all respond to human motivators: a concerned manager, who sets clear expectations, motivates us, and removes roadblocks is one with whom we want to cooperate.  Try this for six months and see if you don’t improve your employee retention.

If you need further assistance analyzing and addressing your employee retention problem, contact the experts at Ember Carriers at (513)984-9333 or email us at  Sometimes an outside perspective that is both nonjudgmental and caring can help identify the problems and provide solutions.

About Ember Carriers