In order for your business to survive, you must be able to strategically build and retain your team. It is truly within your best interests to keep your team happy.
Competition is unavoidable when it comes to finding and retaining an employee or contractor. You’re competing with other businesses for candidates throughout application processes, so you must make your position appealing. The businesses you’re competing with might have more benefits to offer, and top tier talent tends to go where the most ideal benefits are. This means you’ll want to attract and maintain the team that is seeking the benefits your business is able to provide, otherwise you’ll never be able to make your team happy and keep your doors open. Finding a good fit for a role is critically important, but means little if they don’t stick around.
The key here is to select the benefits your ideal team is seeking. Quality over quantity.
To decide on what benefits make sense for your company, consider what type of person you need to attract to your business given what you’re able to offer them. If you offer typical employee benefits, such as insurance options, overtime policies, sick and vacation time, retirement and social security, profit sharing options, and student loan or tuition reimbursement, it’s still important to consider personalized perks for your team to stand out from the crowd of other businesses your applicants are also applying to. Even if that might mean swapping out a standard benefit for a more competitive one due to budget constraints.
What do more competitive benefits look like? One route is to offer unique transactional types of perks, such as help with meals, travel, technology, or equipment. Keep in mind that benefits come in all sorts of shapes and sizes.
Many businesses who operate on an employee basis (as opposed to working with contractors) are actually adopting benefits typically enjoyed by contractors in order to stay competitive. These types of benefits or perks include flexible schedules, the ability to work remotely, bonus structures, scalable income and ascension plans, and ultimately, approach by value exchange as opposed to salary.
Businesses with high voluntary turnover are not making their team members happy. Unhappy workers, and in turn high turnover, indicate trouble for countless factors within your business, including morale, revenue, productivity, company culture, and efficiency.
The cost of finding and training a new person takes time and money. But how much, exactly? And how concerned should you be if you’re noticing turnover?
Many studies on the cost of turnover have been conducted, and they vary greatly. There do seem to be some patterns when it comes to wages and specific positions a team member fills within a business. We’ve seen studies that indicate that replacing an employee can cost, on average, between 6 months all the way up to two years worth of their annual salary.
How is this possible? What goes into calculating the cost of replacing a member of your team?
Consider the following and how much it truly adds up in terms of money AND time:
- Finding and hiring (advertising and recruiting for the position, screening applications, interviewing and re-interviewing candidates, checking references, and administratively offering and hiring for the position)
- Onboarding (training and management of the individual)
- Catching up (the individual may take one to two years to catch up to their predecessor’s level of productivity, plus new individuals will make more mistakes, ask more questions, take longer to do their work, and have more trouble solving problems)
- Cultural impact (your team will notice turnover and take the time to consider why others leave, then disengage, and ultimately slow productivity)
If you don’t already, you must get internal systems and reporting in place within your business to track your turnover and resulting costs. We also recommend tracking your retention rate and conducting exit interviews to make sure you always have the full picture. Don’t make the mistake of assuming your team members are happy or guessing about how to retain them. You should be constantly assessing the benefits your business offers, seeking feedback from your team, and staying ahead of turnover costs to avoid financial disaster.
Looking to build your administrative team? Send a note to laura@satiatedartists.com. We can help you find a good fit that will stick around.
-Mikala Francini