Low Employee Engagement? These measures will turn it around

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Low Employee Engagement? These measures will turn it around

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Low Employee Engagement? These measures will turn it around

By , November 18, 2019
employee engagement and retention - Succession Plus

When talking with small to medium enterprises (SME) and family business owners, and you ask them about their major concerns, many will express frustrations around the performance or commitment of their employees. Sentences like “they just don’t seem to take the care that I expect” or “they don’t seem to make the connection between keeping my customers happy and keeping their job” or “they just don’t seem to understand our business”.  These are valid frustrations, but does the fault lie with the employee or the strategies and culture of the business that is their employer? Maybe it’s a combination of both?

Let’s look at the likely costs associated with replacing an employee if they leave within twelve months of commencing employment. Based on employment information readily available, the costs associated with replacing an employee earning $60,000 per annum can be approximated as follows.

Item Cost
Advertising $2,700
Consultant $10,800
Selection $900
Induction $1,500
Interviewing $700
Informal training $6,700
Loss of productivity $3,300
Four weeks’ pay $5,000
Performance management $1,400
Total $33,000

This is a huge cost for any business to sustain. It’s therefore worth the time and effort to ensure that the following measures are put in place to minimise the likelihood of valuable employees not being engaged and leaving.

  • Do we have a strategic plan that is clearly communicated to our team members?
  • Do we have a succession plan in place that involves the retention of our key people?
  • Have we considered things like employee share ownership plans for our business?
  • Do we have a productive and vibrant firm culture?
  • Do our employees know what is expected of them?
  • Do they receive constructive feedback on performance?
  • Do we have a proper system of employee performance reviews?
  • Do we have a comprehensive process for employee selection?

For most SME’s and family businesses employees represent one of their biggest costs and also their greatest resource. Success and failure of a business can very often hinge directly around employee performance and retention. It therefore by implication, also impacts significantly on business value and the stress levels of the business owner.

If you need help in this area it is worth engaging some good professional help to get it right. An expert business adviser can put your business in good stead to retain and engage your employees more effectively, saving you money and time in the long run.

scottpatterson

Scott Patterson

Director | Succession Plus

Scott Patterson has extensive business and professional experience, including over 20 years as a principal of a highly successful public accounting and financial planning firm. His passion is working with clients to improve the value of their businesses, and create a more certain future for them, their stakeholders and their families.

Scott's aim is to deliver strategic thinking, tailored advice and integrated solutions for family businesses, SME's and agricultural enterprises.