Over the last couple of weeks, I have been writing about how employees are leaving their jobs under the guise of “more money” or “better opportunity,” when they are really quitting on you or your first line managers.
About 87% of the people who claim that they are leaving their job for money or a better opportunity are not after more money but, none the less, leave your organization creating a hole that cannot easily be filled. Depending on the level of the person leaving, cost estimates of replacing a person range from 100% to 500% of their annual salary. And these are just the hard costs of finding and replacing a valuable team member. They don’t account for the lost knowledge, history, or customer goodwill that your employee has built up over time.
When customers routinely interact with specific members of your organization bonds of trust are formed. These bonds of trust are built over time and are critical when something goes wrong. When I know and trust someone at Acme Corporation and my order has a problem, I’m confident that it will be worked out quickly and efficiently. When I don’t know anyone there or worse, when the person I know and trust is suddenly not there, my level of confidence drops dramatically and I am suddenly much more alert and ready to jump on any problem, regardless of how minor it might appear.
Think of the difference this could make to your bottom line. If you are losing mid-level employees where the cost of replacing them is approximately 300% of their salaries, you could add hundreds of thousands of dollars of profit to your bottom line each year with a modest reduction in the number of employees who left your organization. If 5 less mid-level employees making $40K left each year you could improve your bottom line by over $600K annually. By way of comparison, if you operate at a 5% net margin (not unusual for many businesses) you would need an addition $12 million in sales to add $600K to your bottom line.
Pretty startling, isn’t it.
How can you reduce turnover? How can you ensure that 5 mid-level employees will want to stay and work in your organization rather than leave for another job or worse, go across the street to a competitor?
The best way is to invest some time and energy in training your management team at all levels. Too many organizations focus on developing their top level people and ignore the training of their front line managers. Yet, the front line managers have much more interaction with the employees AND the customers than upper level executives do. Front line managers are the people that most employees and customers associate with your organization. They are the people who inspire trust and create suspicion, build bridges and dig chasms, develop loyalty and loathing inside your organization. At the same time, they tend to get the least amount of development and are the most likely to fail.
It might be time for a hard look in the mirror. Where has your organization been spending their developmental dollars and resources? Who has the biggest impact on what happens in your organization every day?
It’s time to start thinking about how to create front line managers who can actually help, not hinder, your organization’s growth.
At ECI Learning Systems LLC, we are dedicated to helping companies get the greatest return from their most valuable asset: their employees. We work with you to align 3 key organizational factors:
• Your Company Culture
• The Leadership Styles of your key managers
• The Expectations of your Employees
When these 3 factors are aligned, you create an energy in your company that improves productivity, reduces absenteeism, increases creativity, and positively impacts your bottom line. Contact ECI Learning Systems LLC today to get your free Workplace Evaluation.
Until next time....
ECI Learning Systems, LLC