What does the resignation of an employee cost my business in real terms?
I’m often asked this question by SME owners. In the accountancy sector – and I’m assuming other sectors are similar – filling a vacancy can cost as much as 25% of the person’s starting wage. But this statistic hides the true cost to small businesses.
Each individual brings value to your organisation in a range of ways. They understand your marketplace, build relationships with customers, gather a unique set of skills and experiences, and contribute to team morale.
We all know that replacing talent is expensive, but risks to your bottom line can start to emerge long before an employee resigns. If your people are discontented, you face reduced productivity, stress-leave absences, inconsistent or poor customer experience and, in the worst cases, defending yourself at an employment tribunal.
That’s why, at Haines Watts, we’ve moved away from talking purely about employee retention. Instead we build people into the heart of our business planning – and we encourage the owners we work with to do the same.
Place people at the heart of your strategy
So, where do you start? As with business planning, defining your organisation’s purpose, vision and values is the first port of call for any people-driven strategy.
Once you’ve described where your organisation has come from, where it is going and how it’s going to get there, you can provide your people with a framework that allows everyone to move in the same direction.
The strength of such a framework is that it allows your people to strive for success within safe parameters and with clear, measurable outcomes – particularly in three areas:
- Behaviours: you can define how employees are expected to behave and how they will be rewarded for displaying those behaviours. From the business owner down, you can promote a positive, productive workplace culture
- Expectations: it encourages you to set logical, measurable and achievable goals; be consistent and transparent and avoid setting your employees up to fail.
- Communication: you can encourage everyone to be brave, honest and fair. In return, actively listen to their ideas and feedback.
At Haines Watts, we implement a range of strategies – linked to our purpose, vision and values – which aim to continue making us attractive to talent, from staff surveys and regular employee performance reviews to professional development opportunities.
Top employee engagement trend
What’s been particularly interesting, both for myself as a small business leader and for the owners I work with, is that this process has revealed to us just how important ‘leadership’ is when it comes to employee engagement.
Indeed, the ‘Key Trends in Employee Engagement 2018’ report showed that ‘leadership’ trumps every other engagement factor, including the line manager, the company as a whole, personal growth, teammates or wellbeing. When employee engagement is high, the customer responds in kind.
That means that the relationship formed between SME owners and their people has never been more important – so talk to us today about how you can get started.
How has your people plan helped your business thrive?
Read more like this:
How to build an employer brand to attract & retain talent
Contact us or find your local Haines Watts office to find out how Haines Watts business improvement services or HR advisory & Talent services could help you.