The cost of replacing one employee can exceed 1.5 times that employee’s annual salary. For this and many other reasons, employee retention is a crucial business priority, no matter how big or small your company is. Some furniture companies sail along with low turnover, while others struggle to keep staff on board. Why do employees leave? More importantly – what makes them stay? I invite business leaders, managers and supervisors in the furniture industry to follow me through a weekly series as we explore some myths and set out some concrete steps to developing an employee retention strategy.
Employee retention is going to be a key business survival tool, and it is a serious matter. But it’s not just the loss of talent and experience - the costs of excessive turnover can eat up to 40% of a business’s net profits.
Although the current economic slowdown may provide a temporary reprieve from the labor shortage, the demographics continue to impact the market, and as it goes back on the upswing, your efforts to retain good employees will serve you and your business well. Keeping your star employees on board will help to ease the pains of the labor crisis, and considering the cost associated with re-hiring and re-training staff, it will also help your bottom line.
There are other compelling reasons to focus on employee issues, even in this economy. In some areas, it is still an employees’ market and the employees will migrate to employers who fulfill their needs. Does your competition have all of the best talent in the industry? What can you do to become the company that attracts and retains these star employees? The answer: plenty. Employers, managers and supervisors can implement solutions both simple and complex, short term and long term. The benefits to developing an employee retention strategy go far beyond affecting the bottom line; in the next two years your strategy could make or break the company entirely. Without your employees, you do not have a business – it’s as simple as that.
This series is not meant to provide any type of quick fix. But in the coming weeks you will gain some insights and some practical tools to help you increase your effectiveness in retaining the very best talent in your industry.
We’ll start next week with employee orientation, which is a critical first step. Your new employees’ introduction upon “onboarding” will set the stage for the rest of their journey with your organization. In the following weeks we’ll explore how teams evolve and perform right through to rewards and recognition. Each week will provide real life examples, including veteran furniture store owner, Greg Sager of Victoria, BC, as well as tips and tools that will point you in the right direction to becoming an employer of choice.
Take the helm, keep your good employees on board, and have some fun on this journey. Bon Voyage!
Author, “ Keeping Good Employees On Board”