Over here in the States, there’s a certain segment of people who got real upset a few years ago when President Obama pointed out that business owners aren’t creating successful companies all by themselves. He was talking about the infrastructure that a civilized society is able to provide, through government and other businesses, for its citizens—roads, electricity, communications, buildings, etc. That you didn’t build it alone isn’t an insult, but a lot of business owners here chose to take it that way. Another segment of the population heard this message loud and clear, though: the employees of businesses. They know full well all the things their employer isn’t doing, because they were hired to do those things. Hiring someone isn’t charity. If I pay someone to paint my house, I’m not doing her a favor. It’s why they’re called mutually beneficial arrangements: everyone gets something out of it. The same goes for employment. Because of the accepted hierarchy of things, it’s often the case that the owner will get more out of it than any employee—in terms of dollars—and there’s nothing wrong with that. The problem starts when staff feel like the money’s not even worth it to stick around. As is too often the case, the blame for this fall squarely on the shoulders of management and the owner. This doesn’t mean they’re mistreating employees, nor should you infer that I think this is malicious. More likely, it stems from something much more damaging to a business than malice: indifference. If, the last time someone in your employ quit, your response to that was, “Oh, well. I’ll just hire another person,” you might be part of the problem.
And that problem doesn’t lead to just perpetual searches for employees while you wonder why it’s so hard to find good help these days. Those searches cost you money. The time spent to process the paperwork of your new hire costs you money. Training costs you money. Any lingering bad feelings your ex-employee might share with friends may, right or wrong, come back to bite you and cost you money. How much money? According to the Bureau of National Affairs, a private organization which isn’t nearly as governmental as it sounds, US businesses lose $11 billion annually due to employee turnover. That’s kind of a scary number, unless you put it in context. “Businesses” is a pretty broad term. If you subtract government entities from the United States’ GDP, leaving just business, $11 billion is less than one tenth of one percent. Even if you just based it off the revenue of the US restaurant industry, it’s still only 1.4%. Bad, but not devastating. So why am I downplaying the monetary impact of employee turnover while warning you against an environment that encourages employee turnover? Because there’s more to the cost of unhappy employees than just money.
That’s not to say money is never a factor, but the fact is people very much value their happiness with a job. This post over at aaronallen.com—the website for a restaurant consulting firm—notes that only 12% of people quit their jobs because they got a more lucrative offer somewhere else. The rest are employees who, for one reason or another, don’t feel good about their jobs. Maybe they haven’t been trained well enough and always feel one step behind. Maybe they’re passionate about the business and have ideas or input, but no one listens to what they have to say. Or maybe they just hate their boss, like 75% of employees who leave their jobs. Hell, even I hate my boss—and I’m self employed. The solution to this, then, is to invest some extra resources in creating employees that feel empowered at their jobs, are excited about the product, and don’t think twice about going the extra mile whenever needed. Because Aaron Allen & Associates are a consulting firm, they had to give this a jargonised name: Employee Engagement. The engaged employee is one who will stay because she feels part of a team, and won’t be tempted by a competitor offering a dollar or two more an hour. Good employees will absolutely justify the expense of hiring them. But, the article notes, “by increasing spending on associate engagement programs by just 10%, companies could increase profits by $2,400 per year per employee.” Your mileage may vary on that ROI, and it might not be so easy to quantify, but your business will get something out of it. Among other benefits, engaged employees are:
- More likely to spread the word about your business and recommend it to friends and family (and with social media, much more than that).
- Going to effortlessly take care of your customers, representing your business in the best possible light.
- Less likely to call in sick and create problems for everyone (and more likely to fill a spot vacated by the disengaged employee who calls in sick)
Now, no one seems to have any research on this, but I’m willing to bet that owners who invest in their employees to keep them engaged reap benefits beyond the financial. Employees who don’t cause problems eliminate a lot of stress at the workplace. The ones who are outright happy to be there can be a boost to everyone’s morale, including the owner. And imagine the feeling of security you’ll get when you take your first vacation in 5 years and don’t have to worry that no one there knows what to do in your absence. These are all things that you can’t quantify the cost of when you don’t have them. But you also can’t put a price on benefits like these.