It only occurred to me this weekend that a high employee turnover rate can cost many £1,000’s and even millions…
On Sunday we were at our local karate club for an all day competition, and in between supporting our kids (who competed in a number of events) I managed to squeeze in a few pages of a very interesting book.
It detailed the operational struggles of a commercial cleaning company. And their biggest challenge of huge employee turnover. On occasions it hit 4000%. Meaning they had to replace 400 employees (same as they employed) every 3 months. And as you can imagine, that was tough to do and moral was at an all time low.
Although they had plenty of business, profit margins were very tight and the high turnover rate was costing them a small fortune. They estimated the process of loosing, hiring and training employees put an additional 50% on the annual wage bill. Which was close to £11 million and about £3.5 million higher than it should be. So you can see why they had very little profit left.
The solution for them was a very inventive employee incentive program, based around their employees dreams. Yes dreams…
It goes without saying that most cleaning jobs don’t pay that well, and at first glance there doesn’t seem to be much in the way of career progression opportunities in cleaning. So how the hell do you stop employees moving on for a few pence per hour more.
You have to be super inventive that’s what. How many of us would have thought about creating a program that helped your team achieve their dreams. If you think about it, dreams are what drive us all and if we didn’t have dreams what would be the point of getting out of bed in a morning.
Dreams can be many different things, financial, security, family, travel, career etc. And we all have them. Some will be similar and others will be very unique. But have many of us really focus on them and how many organisations do you know that take the time to understand the dreams of their employees?
At times the book brought tears to my eyes, seeing the way they impacted lives. Helping people plan their finances so they could buy a house, go on holiday and buy a car. And creating language workshops to help them, their children and their parents with their English. They even employed a small army of dream managers, who were a cross between a financial adviser and social workers, who’s role was to help each individual put a plan together to achieve some of their dreams.
So what was the impact on the organisation?
One word sums it up. Massive…
Employee turnover rates reduced to just 17%. Employee numbers doubled and profitability increased by millions. But the greatest achievement was seeing 100’s of people achieve some of their dreams.
Yes, this was an amazing employee program, and I’m not sure it would work for everyone. But it goes to show that employee incentive programs have the ability to reduce your costs by retaining employees, whilst also re-engaging them to help you fuel growth.
In our business (we have not yet employed a dream manager) we do try to match the strength and aspirations of our team, to the roles being made available as our business grows. A good example of this is Adam (who joined us a number of years ago as a young apprentice), and is now training as a photocopier engineer. And Steve, who’s passion is IT, websites and graphic design. And as we have grown and our needs have changed, we created roles around both Steve and Adam. Now they are happier in their work and we benefit through their new skills and much higher productivity.
Dreaming though is certainly something I do a lot, and maybe it’s time our team started to open up about their dreams too. We can then help each other achieve some of them.
But what about you? Are dream managers to extreme? What other employee retention strategies have worked for you?
