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Financial textbooks refer to employees as human capital. Management textbooks label employees human resources. However, the most successful companies treat employees as human beings. When revered and treated with respect, great people will take a company to the highest levels of success.
As a business owner, you hear it all the time, "Recruitment is our No. 1 priority!" While continual recruitment of talent should be a top priority - even when the business doesn't have immediate openings - it should be considered priority number two. At the top of the list should be employee retention, because while good people are hard to find, great people are much harder to replace.
The short version of your company's leadership philosophy should consist of two words: "Hire right." When management hires the right people, great results follow. Few leadership techniques will have a lasting impact on the wrong hire. When you think about your most successful, most productive and most enjoyable years in business, they tend to center around the years you surrounded yourself with the best people. And more often than not, it wasn't anything you did to make them great, except invite them to be part of your team.
So, how do you keep your best and brightest from crossing the street and taking the next best offer? Hiring is only the first step. From there, you need to train, coach, engage, support, encourage, recognize, reward, promote and compensate them in a way that will exceed their expectations. Contrary to managers' perceptions, studies show that money is not the highest motivator in retaining employees, especially among 20-somethings who place a greater importance on lifestyle and professional challenge.
As a result, management can no longer live by the former golden rule, "Treat people the way that you want to be treated." A baby boomer's motivations are probably quite different from those of a 25-year-old. Therefore, the golden rule is evolving to, "Treat people the way that they want to be treated."
In a leadership role, it's vital to understand the unique wants, needs, desires and goals of each staff member, and to make sure your organization becomes a place where each can be realized. You may have superstar employees who, if they left the company, could significantly impact your profitability.
Provide these individuals with golden handcuffs in the form of increased salary, bonuses or other monetary and non-monetary incentives so they wouldn't consider working anywhere else. While initially this may not seem entirely fair, assets to the company should be treated as such. Even professional sports franchises pay their athletes proportional to their value to their organization.
As the saying goes, "People don't care what you know until they know you care." Get to know your employees and take a true investment in their lives and well-being. As a manager, there are many small yet powerful adjustments you can make to attract, hire and retain the best and the brightest.
Get out from behind the desk and practice "Management By Walking Around" (MBWA). There is nothing more insightful than spending time in the bullpen, getting to know your employees and asking questions in an informal setting. MBWA breaks down bureaucratic boundaries and makes you accessible, approachable and real.
Send handwritten notes congratulating employees on a recent success and let them know, as their leader, you appreciate their hard work. Budget permitting, include a gift certificate to a favorite store or restaurant.
For married employees, send handwritten thank-you notes to their spouses recognizing the achievements of your employee and acknowledging the time spent away from the family. Budget permitting, include a spa certificate, mall certificate or other token gift.
For younger employees who are new to the workforce, send notes to their parents about their young adult's successes and compliment them on raising a great person.
Practice random acts of kindness by freely delivering movie tickets, coffee cards or other tokens of appreciation to employees who exemplify best practices. This could be done informally or through a program entitled "Catch Me At My Best," where co-workers or customers are encouraged to share a great experience.
Time off with family and friends can go a long way in creating loyal fans, so offer paid days off to each employee for their birthday. Also, provide better monetary and non-monetary benefits than those inside and outside your industry. Paying a little more in health insurance, providing profit sharing or contributing to an IRA will be more than made up by reducing the cost of attrition - not to mention improving overall employee satisfaction.
Have peer-chosen employee-of-the-month awards, branded to your company, with personalized certificates including traveling trophies/banners and a cash or gift certificate surprise to the winner.
Have periodic staff meetings to recognize successes, including awarding the employee of the month and publicly reading all the reasons for his or her nomination. In addition, use these staff meetings to uncover internal and external areas that need improvement and invite employees to develop solutions. Be sure to tap those most vocal to take a leadership position.
People are energized by organizational synergies and feeling part of something greater than their own contribution. Living the company culture can be as easy as renaming your associates. Disney has castmates, Starbucks has partners, Owens and Minor has teammates, but most importantly, employees and leaders alike need to live the culture you create.
Calling your associates partners but treating them like servants will do more harm than good.
Use the magic words "thank you" often. People appreciate feeling appreciated. Stated with true sincerity, you will receive a greater return on investment by thanking someone than anything else you can do.
Depending on the industry and the position, studies show the cost of employee attrition - which includes direct and indirect costs associated with rehiring and retraining - could climb upward into tens of thousands of dollars and could increase to much more when factoring in the opportunity costs and lost revenue.
The goal is to create raving fans who are loyal beyond reason. It's very difficult for other employers to lure away an individual who has an "I love my job" attitude. And that is the real bottom line.