Jeff McLanahan
Contributing Writer
Service Experts/Enercare

Is that number:

a) The amount of effort every pro athlete gives to their team, or

b) The average employee turnover in your center every year

The truth is that the answer is most likely b.

Reading that number will either make you laugh or cry.

If you laugh – rationalizing that “it’s tough out there and people will leave for a nickel so there isn’t much that can be done”, you may be headed straight down “going out of business” road.

You cry if you realize that this rate of employee turnover is not sustainable in the near and-long-term. You realize that you are sliding toward a breakdown if you don’t address the problem today, and start applying the fixes tomorrow.

For years, many have pretended turnover numbers were not “that bad”, preferring to complain that equipment prices and government regulation are the primary causes of shrinking margins. But we all knew turnover was a bad sign. In comparison, the retail industry (e.g. Wal-Mart) now suffers about 50{938cd9e8dae860e800efc538277d4f7684e6f6981618ba70d1c34357a53c2e1f} turnover according to The Wall Street Journal, and considers itself in crisis mode!

The fact is that we don’t have a “labor” crisis, we have a turnover crisis. To be even more accurate, we have a retention crisis.

Labor costs are typically one of the highest expenses in our industry, until you consider the price of turnover. Industry estimates for technicians, plumbers and electricians replacement costs are very high, typically 20{938cd9e8dae860e800efc538277d4f7684e6f6981618ba70d1c34357a53c2e1f}-30{938cd9e8dae860e800efc538277d4f7684e6f6981618ba70d1c34357a53c2e1f} of their initial salary. So if you employ 20 people but hire 22 each year, do the math on your replacement cost. How much would a 25{938cd9e8dae860e800efc538277d4f7684e6f6981618ba70d1c34357a53c2e1f} reduction in turnover save your business?  How would it impact your service level, teamwork and the productivity of your staff?

Consistently having 100{938cd9e8dae860e800efc538277d4f7684e6f6981618ba70d1c34357a53c2e1f} or turnover puts a strain on payroll, administration, systems and service. It can also impact management turnover since a majority of their time will be spent recruiting, hiring and training new employees instead of managing quality, service and sales.

When we lose a manager, we often “battlefield promote” someone to take their place.  They were good employees in their previous role but are not prepared to perform the job of manager so they become B players instead of A players.  And remember, A players hire A players; B players generally hire B and C players.

There are generally several things that you can address in an effort to reduce turnover.  To begin your efforts, make a list of every reason good employees leave and then put a plan in place to eliminate those reasons. The short list may include: unfair wages, lack of recognition, no career-path, ineffective supervision, bad or no training, bad hiring, no ongoing development and failing to communicate how their work matters to the big picture.

You don’t build business, you build people. People build business. Today you need good employees more than they need you, and the truth is that high-performers choose you, you don’t choose them. Strong culture and leadership attracts them.

Make the hiring process like you make everything else: exciting, fun, fast, innovative. Reward managers who attract and retain the best people. Provide appreciation and recognition at every opportunity.

The task is daunting, but not impossible. Brands like Starbucks, In-N- Out Burger, and Chick-fil- A have taught us ways to build strong teams by hiring right, developing continuously, providing career paths, and treating people with dignity, care and respect.

If you are truly committed to reducing employee turnover, then initiate a plan today and give it 110{938cd9e8dae860e800efc538277d4f7684e6f6981618ba70d1c34357a53c2e1f}!