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Motivating and Retaining Employees

By Tom Verzuh

What is the benefit of motivating my employees and how will that help my company?

Replacing an employee can be quite expensive. According to statistics from both the U.S. Department of Labor and the U.S. Chamber of Commerce, costs to replace an employee run between 33 - 40% of their salary.

Factors that contribute to those costs include loss of time, production and sales. Plus, there is the expense of training new employees once they come on board.

In addition, there are costs for finding a new employee. For instance, advertising costs in the Denver Metro area can run around $1,700. Of course, that doesn't guarantee the caliber of responses and if you can't find someone on your own, then you have to add a recruiter's fee to the equation.

That's why, with all the time and money involved, you don't want to lose good people if you can help it. Following are some suggestions in motivating and retaining employees:

Treat Employees the Way you Want to be Treated
That sounds pretty basic but it works. Assume every employee is getting job offers from your competitors. Then, think about how you are treating them. What will their response be to job offers from other companies? If they turn down other offers, you're probably doing a good job. When in doubt, spend time with your employees and ask them.

Treat Them Like Your Customers
Hopefully, you're treating your customers the right away. If so, then treat your employees the same way. Be fast and responsive to their needs. That doesn't mean that you have to give them everything they want, but you should respond quickly and deal directly with any situation that arises.

Manage Objectively
Try to manage objectively rather than by personality or crisis. Too many managers manage by today's events and send their employees off in twelve different directions at once causing confusion, exhaustions and hurt feelings.

That's why it's so important to set clear objectives and do so together with the employee. Employees should "buy into" the objectives and agree to them verbally. This way, they will be personally committed to accomplish those goals. Focus on the types of goals you want employees to accomplish and keep the number of goals below ten. Make sure you also provide input along the way or they will probably come up with reasons why your objectives are not realistic and they'll fight against them or even ignore them.

Then monitor your goals with benchmarks. Set the big picture plan for an annual review and then have a series of quarterly meetings to discuss the progress. Between quarterly meetings, arrange monthly and weekly meetings to keep track of any new developments. Be open to why goals may not be met. It might not be the employee's fault. Maybe it's your problem as manager, a company issue, the economy or something else.

Train People Well
Training people can be difficult especially for smaller companies, which are usually stretched too thin already. If you don't train employees properly, they will get into bad habits. Once trained, you can give them a little more "rope" as they progress. Don't be afraid to look to outside sources for help such as trade associations, books, tapes or even in-house seminars for training and motivation.

Let Them Grow
Most people want to grow within a company but not everybody wants to become the vice president within two years. There are different types of growth. For instance, you can vary an employee's tasks or allow them to make decisions without officially promoting them. Make sure employees at least see income growth if nothing else.

Compensation Plans
It's harder for larger companies to have consistent salaries because of geographic considerations but you must justify salaries based on cost of living expenses and experience. Also, be consistent in how you set rules such as vacation policies, commission plans and promotions. Additionally, give employees some kind of long-term retirement, equity sharing or a simple IRA that allows them to save for their retirement.

Support Your Employees
Give employees whatever it is they need to do their job or they will be frustrated. Your top salespeople shouldn't be doing paperwork three to four hours a day or handling technical calls. Departmentalize tasks so people are doing what they are the best at and everyone supports each other.

Have Fun
I certainly don't mean that the office should be like a Saturday night party with friends but you also don't want the work place to be overly regimented. Employees should enjoy coming to work.

Why Employees Leave
The single biggest reason an employee leaves is they don't feel that the company is heading in a positive growth direction. That may be due to financial problems but more often than not, employees don't feel they have the same vision as management. That's why it's so important to communicate constantly and discuss the company's strategic vision with employees.

Another reason employees leave is personality conflicts. Usually people come to a company because of what it has to offer and the growth potential. They usually stay because of management. Even if a company is financially shaky, many employees will remain if they get along with the manager. On the other hand, if their manager is obnoxious they might leave even if the company is doing well.

Surprisingly, money is usually down on the list of an employee's priorities. If an employer is realistic in terms of salary and benefits, then money is generally not an issue.

The bottom line is that everyone wants to feel needed and important. If you can provide those things to your employees, you'll be less likely to have to look for replacements and hire a recruiter.

Tom Verzuh is president of SCW Consulting, Inc. An industry veteran for over 15 years, he has worked for some of the major CCTV and Access Control manufacturing companies in the Physical Security Industry. SCW Consulting, Inc. recruits and places candidates for mid to senior level positions within companies, both nationally and internationally.

Tom may be reached at 720-542-0500 ext. 12 or by e-mail at