Employee Retention

A business man with an hourglass and text reading "How Much Time Is Lost When an Employee Leaves?"

How Much Time Is Lost When an Employee Leaves?

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It can be challenging to estimate the average time lost when employees leave. After all, there are numerous potential factors, including your type of business, the amount of training you provide, and your employee recruitment process.

However, every manager and business owner knows that losing an employee costs valuable time. Perhaps more considerably, in most businesses, this time lost equates to money lost as well.

Evaluating the Amount of Time Lost When Employees Leave

There are three main ways that employee turnover can cost your business time:

Of course, losing an employee means you no longer have their labor hours. The work that your former employee was doing is now nonexistent. This is especially true for former employees who don’t give an appropriate length of time for leave notice (if they chose to quit).

You also lose time because you have to devote labor hours toward recruiting a replacement employee. Now, you’re allocating hours toward searching for a new hire. The current labor market, your company’s needs, and the level of skill required for the position can all increase the time it takes to hire a replacement. Plus, you need to advertise and vet potential candidates. Unfortunately, the time it takes to hire employees can be extensive when you don’t have the proper tools to streamline the hiring process.

It’s important to consider the time it takes to properly train the new employee and bring them up-to-speed in the workplace. This amount of time varies depending on your business, but it can be considerable. Don’t forget: You will need to think about how long it takes for a training manager or fellow team member to teach the new employee. This potentially doubles the hours necessary to train a new employee.

What Can You Do?

Implement Strategies to Improve Employee Retention

If you want to avoid the costs of employee turnover and run your business as efficiently as possible, you need to keep your employees happy and healthy. Employee retention initiatives vary from business to business, but the basic concept is to make working at your company preferable to working at a competitor’s company. Some initiative examples include salary incentives, career growth opportunities, paid time off, and insurance benefits. You can even start something as simple as a weekly happy hour for your team to engage outside of work.

Investing in your current employees reduces the lost time and money from turnover. It’s a win-win for both employers and employees to create a positive work environment.

Hire Applicants Who Will Stay Long-Term

Improving employee recruitment is one of the best ways you can reduce the lost time of employee turnover. There are three main ways that a better recruitment process will help you reduce lost time.

First, having a better system in place to locate and hire new employees will make the actual recruitment time period shorter. When this system is improved, you will find qualified candidates more quickly. You will move to the onboarding phase sooner and replace the former employee’s work hours in less time.

Additionally, you will not have to devote as many human-resource hours toward the actual recruitment process with a more efficient system in place. Remember, the hours that your human resource employees spend also factor into the amount of time you lose. These hours could be spent elsewhere.

An improved employee recruitment process also increases the number of high-quality candidates you attract to reduce your turnover. Being able to focus only on the ideal candidates, rather than having to stress about weeding out poor fits for your positions, ultimately reduces the overall time spent.

The Solution: Sprockets’ AI-Powered Hiring Platform

A woman showing a laptop screen of the Sprockets hiring platformOne of the best ways to reduce the time lost on employee turnover is to integrate Sprockets into your hiring process. Our sophisticated solution to hiring combines artificial intelligence and over 80 years of psychological research to identify the ideal applicants for your needs. It’s not magic — it’s logic.

Plus, it’s proven to work with numerous business owners in a variety of industries, including home health care, quick service restaurants, call centers, and more. You could be the next success story! 

A man in the workplace, reading paperwork

How to Manage and Minimize Workplace Negativity

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Unhappy employees lead to unhappy customers. While it can be easy to overlook an employee blowing off steam on an off day, it should be taken seriously. When negativity begins to fester within one employee, it can quickly spread throughout their team, department, and beyond. In order to keep your business running smoothly, use these tips to minimize workplace negativity.

The first step to minimizing workplace negativity is to acknowledge and understand it’s occurring. When you hear someone say they’re having a bad day, don’t brush it off. Instead, dive in. Acknowledge their grievance and either offer a solution or simply let them know you value their feelings and opinions. If you’re a step removed from employees, task your managers with reporting on when negative comments occur and prepare them to address these comments. However, you shouldn’t solely rely on managers to report. We recommend periodically distributing an anonymous workplace survey to gauge employee satisfaction. A free, popular survey site is SurveyMonkey.

 

Popular employee satisfaction survey questions include the following:

  • Is work enjoyable for you?
  • Do you feel valued in the workplace?
  • Does management seem invested in work and team members?
  • How happy are you at work?
  • Do you feel like your job responsibilities are clear and well defined?

The next step to minimize workplace negativity is to understand the causes. It’s important to learn whether negativity revolves around outside factors, such as home life and health, or workplace factors. No matter the cause, being proactive on these factors are signs of a great employer. For example, if you learn that there is a lot of negativity in the workplace revolving around terrible traffic each day, consider offering flexible work hours. If you allow employees to switch their work hours from 8-5 to 7:30 to 4:30, does this relieve their traffic woes? Picking up on these shared grievances is a great way to quickly turn around morale and improve employee satisfaction.

Another way to minimize workplace negativity is to create clear expectations for employees. It’s reported that 50% of employees don’t fully know what is expected of them. This sense of confusion can fester and create doubt and uncertainty. By letting employees know exactly what you expect of their role, it’s a win-win.  With clear expectations, you can both acknowledge milestones and recognize when goals are achieved. With an extra sense of accomplishment, thoughts of negativity and self-doubt will start to disappear. 

Overall, minimizing workplace negativity is key to business growth. Happy employees are more productive and have a positive effect on your customers. To address negativity in your workplace, take direct and proactive approaches to make a change.

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5 Employee Benefits To Attract and Retain Millennials

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Millennials now comprise the largest portion of the workforce and are in high demand as companies seek younger, tech-savvy talent. 

With record-low unemployment and a crowded recruiting field, how can your company stand out from the crowd and attract millennials? 

Take it from a millennial—here are five employee benefits that will capture the attention of your millennial candidates.

 

1.) Health Care 

Believe it or not—health care continues to top the list of the most coveted employee benefits, even among tech-savvy millennials. In fact, 85% of surveyed millennials rated health insurance as ‘absolutely essential’. Even more compelling, when presented with the option between a 10% raise or better health care coverage, a majority of respondents indicated that they’d prefer better health care. 

This might seem surprising, but the data speaks for itself. Employee Benefits News found that 27% of millennials don’t go to the doctor because they don’t want to incur medical debt and 50% of millennials have received a health care bill that they had not budgeted for. And, as millennials move into their 30’s, many are getting married and starting families, which is all the more reason to seek a robust health care plan. 

A slice of avocado toast a day won’t keep the doctor away, so keeping your health benefits front and center will catch the attention of this coveted demographic. 

Just because a trendy brunch item won’t impact personal health doesn’t mean you can’t shape your health care programs to meet the demands of the millennial workforce. ‘There’s an app for that’ applies to health care too! Consider offering a telehealth program as an alternative option for seeking medical treatments. And, offering both high deductible and PPO options can better meet the health care needs of a diverse population. 

2.) Remote/Flexible Work 

Life happens, and it doesn’t always take a break between the hours of 9 a.m. to 5 p.m. This is exactly why many companies are embracing the remote/flexible work movement. 

A study by PriceWaterhouseCooper revealed that 64% of millennials would like the option to occasionally work from home, and 66% of millennials would like the option to shift their work hours. 

Remote work options also offer several other surprising benefits: higher engagement, increased efficiency and productivity, decreased operating costs, larger hiring pool—the list goes on and on. And employers are clearly taking note; the remote work population has increased 140% since 2005, which is nearly 10 times faster than the rest of the workforce. 

Of course, a shift in work hours or a change in physical workplace might not be an option for your individual workforce. If it’s not, consider other creative ways where you can allow for more flexibility with scheduling and work hours in the workplace. 

 

3.) Student Loan Repayment Assistance 

There’s no denying that stats around student loan debt are grim. As of 2019, 44.7 million Americans owe over $1.56 trillion in student loan debt (yes, trillion with a ‘t’). Yikes. And, more than 11% of student loans are more than 90 days delinquent. The average student loan payment sits at almost $400 per month, which can be a considerable chunk of change for employees in the beginning stages of their career.

Student loan repayment assistance has been a hot topic over the past several years, as more companies are beginning to adopt this innovative employee perks. However, there’s plenty of room to grow. Currently, only about 4% of organizations offer any type of loan repayment program, which means this benefit is still in its unicorn stage—highly coveted and rarely seen. 

And, if you’re curious about the demand— it’s there. 56% of workers with loans indicate that they worry about repaying their loans either ‘often’ or ‘all the time’. And, from a retention perspective, the same study revealed that 86% of employees will commit five years to a company in exchange for student loan repayment help. How’s that for investing in retention?

 

4.) Generous Paid Time Off

Often known as the “experiential generation”, it’s no secret that millennials prefer to invest their money on experience versus physical possessions. The catch? Enjoying amazing life experience requires the time to do that, which means millennials are keeping a close eye on their paid time off allowance. 

Most corporate companies offer a standard 10 paid holidays and 10 additional paid days off per year. Many companies require employees to work a certain amount of time before they are PTO-eligible while others only allow PTO to accrue from day one. And, many companies have a tiered structure where employees are eligible for more time based on tenure. 

 

To capture the attention of millennials, you’re going to have to go against the status quo by offering a more robust and generous PTO policy. Here are a few ideas: 

  • Make employees PTO-eligible on day one (vs a waiting period)
  • Front-load PTO on day one (vs accrual over time) 
  • Lump all PTO into one general category versus individual buckets (ex: vacation days, sick days, bereavement days, etc.)
  • Offer unique PTO days, like a free day off for a birthday or dedicated time off for volunteer opportunities
  • Offer more total PTO days than competitors
  • Include part-time employees in your PTO plan 
  • PTO ‘donation’ program where employees can donate unused days into a general pool

If a complete revamp is on your radar, consider the pros and cons of unlimited PTO and whether this could be a good fit for your organization and resources. 

 

5.) Retirement Savings and Financial Wellness

‘Kids these days… just starting their career and already planning for retirement. How millennial.’ 

After you’re done cursing the clouds, remember that Social Security benefits are slowly declining and many millennials want to have a solid base for retirement—even if they aren’t quite sure how to get there. 

A Northwestern Mutual study revealed that, while millennials are excited about their retirement future, 82% feel that their financial planning needs improvement. And this problem isn’t exclusive to millennials—that same report revealed that 1 in 3 Americans has less than $5,000 tucked away for retirement. 

Get your millennial recruits thinking about their future—preferably their future with you—by giving them confidence that you have their long-term financial success in mind. 

Currently, about 40% of private sector millennials do not work for a company that offers a retirement plan. And even for employees that do have access to a plan, many aren’t participating because other expenses (see also: student loans) are a bigger priority. 

Help your millennial workforce meet their long-term financial goals by investing in them—literally. Offering a retirement savings plan is a great step but providing an employer match is even better. 3% tends to be the standard match, so can your company do better? What about a 4%, 5%, or 6% match? 

From there, focus on educating employees on the reality of retirement—how much they will  need to retire comfortably, how much they should be contributing, etc.—and incentivizing and rewarding good behaviors. Decision support and other interactive tools can be invaluable in quickly and effectively educating employees and driving better contribution decisions.

 

How are you changing your benefits plans and programs to better attract and retain top millennial talent? 

 


This guest blog was provided by Meisha Bochicchio with PlanSource. Based in beautiful Charleston, South Carolina, Meisha works as the Content Marketing Manager for PlanSource. With over 20 years of benefits experience, PlanSource provides innovative technology solutions for a better HR experience. You can connect with Meisha on Twitter at @MarketingMeisha.

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How to Build a Strong Team

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Building a strong, productive team comes from a good foundation, hiring people who fit the culture and a focus on retaining employees. It pays to invest the time into building strong teams. A top multi-unit franchise operator, Mitra QSR, recognizes that, their teams are only as strong as the weakest member. Keep in mind the suggestions below in order to build a strong team all the way around.

 

Focus on People

It’s worth the extra time and money to find and hire an employee who stays around long term and positively contributes to the company. A revolving door of bodies who just show up to work and clock out is costly. These employees are less productive and the time and money it takes to replace an employee is more. Take a step back during your hiring process to understand each person interviewing in order to determine if they share the same characteristics as your best employees. 

 

Value Each Role

Everyone should feel like their role makes an impact on the company. By setting clear guidelines about what is expected of each employee and how their actions contribute to the bottom line, you give them a goal to work towards. When each person is on the same page about their expectations and are given feedback, employees feel valued and work harder.

 

Communicate

It’s important to keep open communication in the workplace. If some employees get bites of information that others don’t, it makes them feel undervalued. By keeping a level of transparency with all employees, it ensures they feel valued and appreciated. 

It’s also beneficial to have quick, weekly check-ins in order to keep an open line of communication. During this time, discuss what they like about their position, what they would like to be doing and any scheduling preferences that can be addressed. Establishing an open line of communication increases the likelihood of finding out when issues with other staff members need to be dealt with.

 

Set Up Goals

From their first day to the last day of work, it’s important to create goals and the accompanying plans to achieve them for each employee. Common goals may include special training, career stepping stones and assisting in hitting store financial objectives. By creating goals for each employee, you give them a purpose for work and a reason to stick around. For example, if you set a goal to become a shift manager within their first six months of work and tell them what is needed to achieve that, they are more likely to stick around and work harder to achieve that goal (and it’s pay raise).

 

Celebrate

When teammates meet their goals or when the store achieves financial objectives, consider celebrating as a team. This is a prime time to bring people together and creating high-functioning, collaborative teams. Also, when a specific person receives great feedback from a customer, give them a shout out in front of the other employees. This creates a sense of pride and gives others something to work towards through positive reinforcement.

 

Overall, working to build a strong team lifts up all team members and positively impacts the bottom line. To hire the right team members who will add to your team, learn how Sprockets’ pre-hire assessments can help.

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Four Strategies to Engage Frontline Employees

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Frontline employees are the ones that interact with your customers every day. They impact whether someone is satisfied with your company, leaves a positive review, or never comes back. Taking time to engage employees positively impacts the bottom line. Read on to learn four strategies proven to engage employees.

Give Them a Voice

Those who are in the trenches of your company each and every day may know it better than upper management. They know what machines constantly break down, what menu item the customers want back, what hinders 100% performance. Enabling frontline employees to share their feedback actively engages them and increases retention.

Career Opportunities

Laying out which career pathways are open for employees is important for engagement and retention. When employees know what they need to do to get to the next level of their career, they are more engaged in their work. From there, when employees begin moving through the ranks, they inspire others in the company to work hard to get to the next step in their career.

Purpose Driven Work

People want to feel like what they do makes an impact. Whether that’s by helping others grow in their position or contributing to the bottom line, it’s important. Frontline employees don’t always get to know the details of their impact. They know they help others and complete their tasks, but they may not know how their work contributed to the company meeting monthly revenue goals or that the store maintained their positive feedback ratings from surveys. By sharing this information with employees and letting them in on the joy of meeting and exceeding goals, it adds a purpose for their work.

Build Relationships

People leave managers, not companies. This is a common saying that is lamented in the HR space, but can be fixed. That’s because the people who feel like an outcast at work or have a negative boss, it impacts an employee. If they can do the same tasks at another company but be surrounded by better people, why stay? For these reasons, it is crucial for managers to build relationships with employees so they feel like they are heard, supported, and fair. However, it is also important for managers to help employees build relationships with others. This can include pre-shift meetings facilitating conversation, after-work gatherings once a month and simply getting to know everyone by name.

Ultimately, not everyone who works for you is looking for a life-long job. However, what you do to engage frontline employees does impact their productivity, attitude, and retention. Moving forward, craft an employee engagement strategy, and begin seeing positive changes in your staff! Plus, before making another hire, ensure you are hiring applicants that are like your best employees. Learn how Sprockets can help you do so.

Letter blocks that spell "career"

Creating Career Pathways for Your Hourly Employees

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With a shortage in the labor force, creating career pathways for your employees is important. Many small businesses and franchisees are using them as a tool to attract and retain hourly employees. 

To begin creating a career path, follow these steps:

 

Step 1: Outline All Roles

Begin by creating a list of all of the roles currently held at your location. This may include cashiers, kitchen staff, kitchen managers, delivery drivers, crew leaders, hiring manager, assistant manager, brand ambassadors, and a General Manager.

 

Step 2: Create a Career Pathway

Creating a pathway may include levels that need to be completed before advancing to the next position. For example, Penn Station East Coast Subs has a program named My Penn Path, which includes six modules to become a Crew Leader and 12 modules to become an Assistant Manager. For an average restaurant location, here are two examples of career pathways to introduce.

Kitchen Staff

 

  • Management training course 1 + six months on the job

 

Kitchen Crew Leader

 

  • Management training course 2 + six months on the job

 

Kitchen Leadership

 

  • Management training course 3 & 4 + one year on the job

 

Kitchen Director

 

General Staff:

Crew Member | Delivery Driver | Catering Staff

 

  • Basic training + six months on the job

 

Crew Leader

  • Management training course 1 + six months on the job

Assistant Manager | Hiring Manager | Catering Coordinator

 

  • Management training course 3 & 4 + one year on the job

 

General Manager

 

Step 3: Get Input from Current Staff

Getting input from your current staff members who have moved up the ranks is important. They will be able to provide insights to what is helpful to know at each step. For example, having experience working the day shift vs. the night shift may be important for the step to becoming an Assistant Manager to understand how many people need to be scheduled and which personalities fit at each shift time. By getting insight from your trusted leaders, you will be setting the program, and future leaders, up for success.

 

Step 4: Roll Out & Advertise Plan

Once your career pathways are defined and branded accordingly, roll it out to current staff members. Consider sitting down with individuals one-on-one to map out how they would like to be involved in the company. During these individual sessions, you will be able to gauge whether someone is going to stick around or if they aren’t committed. This is an easy way to tell which employees are worth investing more time and resources in to train for the management positions.

Next, begin advertising the career path plan on all job postings for your location. Then, when people are brought in for an interview, discuss which pathway they see themselves on. This is a great indicator for the interest of someone in the position and if they will turnover quickly.

Overall, building and implementing a structured career pathway for hourly workers is a great way to boost employee engagement and reduce turnover costs. To assist in choosing the best candidates for your business, check out our Applicant Matching System.

Plus, check out these tips for building a great hiring process!

 

Two people reviewing paperwork to retain employees at their franchise

How Top Franchises Retain Employees

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Learning the tips to retain employees at any business is important. Employees who directly interact with customers have a big impact on customer satisfaction, company image, and ultimately the bottom line.

Retaining employees begins with hiring the best people. Sprockets can help with that. The Sprockets Applicant Matching System is a simple way to determine who is the best match for your company.

The next important retention point is on-boarding. Training employees in their role. Then, getting them acclimated to the culture, and creating a sense of community is important for long term success.

Finally, the experiences an employee has during their first few weeks and months at a business impact how dedicated they are and how long they will stay.

Here’s what three popular franchises are doing to retain employees:

Dunkin’ Brands

An interview with Fred Schlecht of Dunkin’ Brands revealed that increased feedback is one of their factors that contribute to positive employee engagement and retention.

“We walked away from an annual process and a numbered rating system, and instead have shifted to a quarterly coaching process…We’ve gotten a lot of very positive feedback on this approach…Instead of a traditional performance-management conversation where we may be talking about something that happened many months ago, it’s an opportunity to talk about what you’re working on right now and, more importantly, what you can do differently in the next couple months in order to improve your performance. It’s a much more future-focused, actionable kind of conversation for the employee and the supervisor.”

Chick-fil-A

It’s no secret that Chick-fil-A has a unique culture and strong values that they stick to. But, it may come as a surprise that they expect their employees to closely align. Plus, this contributes to their employee retention.

“Chick-fil-A’s proven talent selection process focuses on three C’s: character, competency, and chemistry. These qualities are harder to gauge than traditional factors. But she claims it is possible if you commit to deeper observation. Turner observes the way candidates treat other employees like receptionists who are not traditionally seen as having any sway in hiring decisions. As Turner notes, an individual with character will treat everyone they come across with respect and kindness, no matter their position.”

QDoba

Greg Willman, franchisee of Qdoba, writes about their factors in employee retention. This includes taking care of their employees and providing stability.

“We pay them well. We have provided extremely stable employment and growth opportunities for over more than a decade now, which is what we view as our most important function. In addition, we’ve had a general manager profit-sharing program from day one along with generous health insurance and 401(k) plans. We also provide park membership discounts and YMCA membership discounts. Along with holiday parties, an annual offsite planning meeting, and the like. We also ask them to help take care of others through programs such as United Christmas Service and Habitat for Humanity.

 


Learn more about how Sprockets can help you make smarter hires in order to reduce your employee retention. Get started with a free account to help your franchise hiring.

Plus, check out this article on company culture and the impact on profits.

Sources: franchising.com, forbes.com

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Why Employee Retention Matters

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If you’re like most business owners and managers, you already know that high employee turnover drains a significant amount of resources, time, and money from your business. Not having good employee retention, constantly training employees only to have them resign and take their newly developed skills to other companies means having to start all over again from scratch. Many of those in your position are so used to this scenario that they simply consider it a necessary evil. It doesn’t have to be that way, though. Small businesses have limits concerning how many necessary evils their bottom line can withstand, and a revolving door of employees can potentially erode resources to the point that a company’s bottom line is underwater.

The booming economy also plays a part in employee turnover. With employment numbers lower than they’ve been in almost 50 years, openings in most fields aren’t difficult to find, and wages are rising accordingly. Now is a great time for HR professionals to sharpen their skills concerning keeping quality talent engaged and onboard.

Following are five essential strategies designed to keep employees engaged and onboard.

 

Set Clear Expectations When Recruiting

Employee retention should begin before the position is even advertised. The very first step should be creating a job announcement designed to attract the right applicants — this helps avoid the tedious process of weeding out unsuitable applicants. Job announcements should be written in clear, direct language that leaves no question about base qualifications and expectations involved with specific jobs. This approach helps minimize applicants who are just taking a shot in the dark who may not have the required skill sets.

It’s also important to be upfront about company culture. No matter what skills and abilities a new hire brings to the table, their chances of sticking it out aren’t good if they’re don’t fit in with the prevailing company culture. In order to have a high employee retention rate, you have to be honest.

 

Use Effective Assessments

Not all businesses have the same needs. An employee who thrives in one particular business may be a bad fit for another. This is true even if the businesses are in the same industry. This is why traditional assessments often fall flat when matching applicants to jobs. Another issue is that these types of assessments generally charge around $250 per applicant. As a small business ourselves, we know this can be unrealistic.  At Sprockets, however, we charge a flat rate of $99 per month for unlimited assessments to aid in your employee retention efforts. Furthermore, our assessments aren’t a one-size-fits-all evaluation that operates under a preconceived presumption of what personal attributes are indicators of success in your company.

We use a custom-designed assessment based on existing employees who are thriving in your business. Our process begins when your top producers take our assessment. It identifies the common denominators of the top performers. Next, a Success Profile is created based on the shared mental makeup. After applicants complete the survey, Sprockets provides a mental makeup analysis designed to take the guesswork out of selecting the best candidates.

 

Provide a Positive Orientation Experience

Some companies believe that taking a sink-or-swim approach to new hires is effective. Although this might have some value in cases where a state-of-the-art applicant screening process isn’t a part of the picture, it doesn’t make sense for employers who use Sprockets to follow this road. When new hires have been identified as being those most likely to succeed with the company, employers should protect their investment by providing those new hires with the tools they need to thrive. Roughly one out of every 10 new hires have left a job because of a bad onboarding experience.

The first tool any new employee needs is a comprehensive job description that makes expectations crystal clear. It’s also essential that supervisors and coworkers are approachable and forthcoming with answers to questions. Assigning each new hire a mentor is an excellent idea. The wrong mentor, however, can be worse than not having one at all. A good mentor should be patient, inspiring, competent, and kind.

You can also increase employee engagement by providing interactive reviews. Both the manager and employee should be able to give feedback. 

 

Provide Flexibility 

One of the main reasons employees change jobs is that they’re seeking a better work-life balance. Because many people in their prime working years are also parents, they prize the ability to customize their schedules without being relegated to the slow track as a result. For instance, sick children create dilemmas for virtually all working parents. In addition, an increasing number of adults are responsible for the caregiving duties for aging parents. 

Women in particular struggle with juggling employment and household obligations. Many of them find themselves giving up on the traditional workplace altogether. This is a shame because they represent a valuable segment of the labor force. Employee engagement, productivity, and morale all increase when employees have access to flexible schedules.

Implementing flexible schedules isn’t as simple as just allowing employees to work from home at their discretion. Communication is key. Management should be trained in working with employees who are away from the office. Modern technology provides plenty of apps and programs designed to create a virtual workplace. Make sure to provide management with the training they’ll need to use these tools.

Partner With Sprockets to Build Your Team

Sprockets stands ready to help you build your best team. Please don’t hesitate to reach out to find out more about how we can help. Our services can provide your HR professionals with the tools they need. 

 

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The Importance of Cultural Fit in a Small Business

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Many factors go into a hiring decision. For instance, human resources personnel and hiring managers often consider applicants’ work experience, hard skills, and soft skills. In recent years, the importance of cultural fit has become even more apparent too. In fact, some businesses have begun to give cultural fit equal weight with other attributes or even prioritize it. What exactly is it, though, and why is it important in a small business?

 

Defining Cultural Fit as It Relates to a Small Business

In a nutshell, cultural fit is how well an employee’s mentality and behavior line up with the particular values and culture of your business. Unfortunately, businesses don’t always have a handle on what the culture is truly like in their company. One scenario is when, on paper, the business espouses a philosophy of letting its employees be as independent as possible. In practice, team leaders micromanage the employees. So, companies big and small are not always in tune with the culture in the business.

Now, a small business may pride itself on its family-oriented culture, particularly if it is a family-owned business. Or it may tout itself as lean and determined. It may emphasize that its employees need to be able to make quick, good decisions, or it may explain that its employees need to be well-versed in carrying out orders. Some small businesses, however, don’t fully understand what culture fit is and why it’s important. When they do hiring, they don’t consider that aspect of applicants’ profiles, and that’s a big mistake.

 

Everything is Amplified in a Small Business

From our experience, we’ve seen that practically everything is amplified in a small business. That is a major reason why hiring for culture fit is critical. There are fewer employees and fewer channels of communication. More direct contact takes place between customers/clients and every employee in the business. If something goes wrong, it’s liable to go wrong on a bigger scale.

Indeed, just one “bad” hire can do horrendous damage to a small business. The damage need not be anything as direct as an employee angering an important client, although that can and does happen. Rather, it can be indirect and build up to a devastating level over time.

Consider the following:

Someone who doesn’t fit with the culture of the business is hired. Let’s say this person resents following a 9-5 workday at a traditional business and doesn’t really follow the dress code.

This person’s attitude affects the morale of the other employees, who bristle at the new hire who comes in late, leaves early, and wears jeans and T-shirts. Employees’ productivity and morale drops.

Now, there is absolutely nothing wrong with a business that lets its employees set their own hours as long as they get their work done and to dress as they see fit. However, not every business is like this. Suppose you’re a business such as a retail store that needs employees to come in on time, leave on time, and follow a certain dress code. Your employees need to be able to understand and follow the values of your business.

 

Limited Space to Experiment

A small business doesn’t have as much room as a larger business to navigate and make mistakes. So, it’s worth investing additional resources and time to finding a proper cultural match. In a larger business, someone who is a bad culture fit might affect the morale of the immediate team members, but that may be where the ripple effects stop. In a small business, potentially everyone in the company could be affected.

 

The Ripple Effects

Earlier, we touched on a few ways in which bad culture can affect the business. Here’s a bulleted list that outlines a more extensive list of examples.

  • Bad work quality
  • Lowered productivity
  • Lowered job satisfaction
  • Decreased morale
  • Poisonous work environment
  • Higher employee turnover
  • Stressed, possibly resentful employees
  • Decreased profits
  • Fewer clients or customers

Say that Bob and Jane see their co-worker at a small independent bookstore constantly arrive late and leave early. He calls in sick often and shows up in T-shirts and jeans. He kind of ignores the store’s customers. Bob or Jane (maybe both) may begin to question why they’re even bothering to be productive employees when this guy does what he wants and gets paid the same as them. They resent the employee and begin to think less of their boss for hiring this person. Bob or Jane leave the position, and the search must begin anew for another employee.

Even if your business is laid-back, a poor culture fit can still be harmful. Take a business that encourages employees to wear T-shirts and jeans and to come into the office whenever. A new employee is hired who checks off all the hard skills on paper. Everyone’s excited, but problems may arise quickly if this employee prefers a traditional way of working. For instance, the employee may not mesh with other team members and lose motivation to work. It’s costly to keep an unproductive worker around, and if that worker leaves, to go through another hiring process.

 

Diversity Is Important

You can still have diversity in your small business while hiring for cultural fit. Actually, having a diverse workforce can help your business become quite successful. We want to emphasize that a cultural match does not equal hiring people from the same backgrounds and with similar experiences.

 

Nailing Down the Fit

To be sure, business culture can be tough to nail down. Since it’s important that everyone in the business align with its values, how can a business succeed if half of the employees are creative thinkers and half are more rigid thinkers? It’s because culture goes deeper than that. What type of thinker you are matters less than attributes such as self-awareness and ability to collaborate effectively. So, a business filled with employees who practice different methods of thinking/approaching problems can still be extremely profitable. These employees just have to align with a company culture of, say, respect, and collaboration. Having diverse people in your business is an excellent thing, but the culture fit still needs to be there.

 

Practicalities Matter

On the most basic and practical level, the right employees matter for small businesses because they don’t have as much time and resources to spend on hiring. When you hire the right type of person, you hopefully won’t be hiring all over again in a few months when that person or other employees leave. On a deeper level, making several poor hires for culture (or even just one bad hire) may lead to a toxic work environment and hurt the bottom line of your business. If the business keeps hiring people who don’t work out, there may be a mismatch between the perceived (“on paper”) culture and the actual culture. Alternatively, hiring processes may need to be changed, and the people doing the hiring should become more aware of cultural issues.

 

To understand if an applicant will be a good match for your business before they’re hired, learn how Sprockets’ Applicant Matching System can help.

 

Bonus Blog: How to Discover Your Corporate Culture

A woman working at a restaurant

The Importance of Employee Engagement

The Importance of Employee Engagement 1920 1080 Sprockets

Employee engagement can be an abstract term in the workplace. What does it really mean to have engaged employees and why is it important? Here’s why. Engaged employees go beyond their basic work functions to actively contribute to the company’s goals. An engaged employee produces better work, more profit, and a higher retention rate. It may seem like all employees should be engaged, they’re getting a paycheck, morning coffee, and a reliable job, what else could be missing? A recent survey by Gallup revealed that only 33% of workers are actively engaged. Read on to learn why employee engagement is important and download the e-book for tips to increase engagement.

 

Employee engagement boosts productivity.

Those who are engaged recognize the company goals and how they can help reach them. They see their purpose in the company and know that their actions make an impact. With that type of belief and engagement, they work harder than their less-engaged peers. Companies lose over $500 billion on an annual basis from disengaged employees.

 

Employee engagement leads to higher profits.

Engaged people are more productive, they focus harder on getting work done and feel a responsibility to meet and exceed goals. In fact, a Gallup poll indicated that engaged employees are 21% more productive than their less engaged counterparts. For a sales position, this may mean an extra $100,000 in sales. For a marketing position, it may mean an extra email campaign is generated that bring in more leads. In a customer service view, happy workers lead to quality work, happy customers, and more profit. No matter the position, productivity has a major effect on profits.

 

Employee engagement leads to higher retention.

Only 12% of employees think their organization does a great job with onboarding. This is a crucial time to engage new employees as 50% of people decide if they are going to stay with a new company within their first week at work. If they have already decided against staying, they aren’t going to be engaged. They will likely be actively disengaged if they do not see a long-term relationship with the company.

Employees who are engaged view their future with the company. If your company goes through a period of trouble or layoffs, they will be more likely to stick it out. These are the times where it is important to monitor employee engagement and reward those who are engaged.

In conclusion, companies experience better productivity, customer satisfaction, and an increase in profits with engaged employees. Sprockets’ Applicant Matching System (AMS) allows you to see which job applicants will be a great cultural fit for your company, meaning they will be more engaged. Learn more about our AMS or get started today with a free account.

 


 

Read the full E-Book, The Ultimate Guide to Employee Engagement.