Today we’re covering an absolutely essential but often overlooked topic. How do you retain your current employees? We think a better way to reframe that question is “how do you rehire your current employees?”
If we look at the market right now, it’s different and it will be different. We speak to so many small business owners who say “it’s gonna go back to normal” or “we see a trend heading back to office” or “this is going to equalize.”
Your thought does not equal my fact. We’re in the market every day. We talk to leadership candidates in various industries at various levels every day.
What we’re gonna tell you is the reality of what’s going on in the market. Now, there’s kind of three types of business owners out there.
Number one is gonna say we’re full of crap. They’re just gonna keep doing business the way They’ve always done. And that’s fine.
Number two is gonna say that they’re already on that road. They were already taking these actions and that’s awesome.
Number three is gonna be the people in the middle who know there’s something going on and are looking for ways to remain competitive and adjust to the market. The absolute advantage a small business business owner have is to be agile. Small biz owners can say “we’re gonna make a change in policy today” and implement that change immediately. Large corporations can’t do this.
It’s like driving a a speedboat versus an ocean liner. A small business owner can be agile. And that’s a lot of what we’re gonna talk about today. So let’s look at the current market. Prior to the pandemic, seven out of every hundred jobs was remote. During the pandemic, that number moved to 78. 78%. That’s not a small move. Currently, 48 to 50% of the market are looking for either full remote or a level of flexibility in their schedule. Pre-pandemic, that number was 30%.
Right now, one in six job offers are being rejected and one in three employees are quitting after three months.
We need to talk about how do we retain our current staff or how do we hire internally to keep those people? You have three types of employees. You have the underperformer, you have the performer and you have the overperformer.
The overperformer has capacity and potential to drive your business and help you scale. You have the performer who’s steady. They know their job, and they do what you ask. Then you have the low performer – the people you’re constantly managing and who you keep because you can’t find any anyone else.
We can’t just make a broad statement about what you specifically can do to retain your people. You need to consider the person. So if you’re looking at your high performers, you’re gonna take a much different talk than you are with a low performer.
If your chance of retaining talent is 50%, and we could say, in a real general way, if you hire someone outside of your organization, you run a 33% chance that they’re gonna be worse than the person that you lost.
To put that in perspective, if you let someone walk out of your business to take an increase at someone else’s business, that’s a high performer. It’s like selling your house below market then going to Vegas. And if the roulette table had three equal colors – black, red, and, yellow picking one of those and taking a one in three chance that you are going to do better on today’s market.
It’s crazy, and conservative estimates for hiring outside of your organization areanywhere from one to four times that person’s annual salary depending on the position.
So, if we let a high performer walk out of our business, we have a two thirds chance that the person we hire because they left is gonna be worse or as good as they were. We have a 50% chance they’re gonna stay with us for three months and we’re gonna have to invest if that person’s salary was $80,000, at least $80,000 in their recruitment training and getting this person up to speed and having them be productive.
So the smartest hire we can make in this market is the internal hire.
Hiring the people that you already have – how do we do that?
We start with what are people looking for? Remember, your opinion does not equal our fact, and our facts are when you’re in the market, this is what we hear all the time:
- “I just want to test the market”
- “My friend just left this company and got a 20% increase”
- “My schedule is not flexible enough”
Think of this – you have an $80,000/year employee that quits to take a job at $96,000.
Now you have to spend $80,000 to replace that person with someone who could be worse, could be better, or could be the same. And you have a 50% chance that they’ll stay with you for three months. The obvious choice is to retain the talent in the building even if it costs you $16,000. That’s the easy math, right?
So how do we have these conversations with our people? And we talked off the beginning that as small business owners, we can be agile. Don’t make a sweeping policy. We manage individuals. So, if you have high potential people in your business, you need to go to them and ask them some questions.
Some people now are dipping into savings to make ends meet and loyalty has a price tag. Yes, they’ve been with you for five years and they’ve been loyal, but if they’re dipping into their savings to buy groceries and you’re not helping them, that loyalty is fleeting and they will go to someone who will help them.
So let us as business owners sit our high potential people down and say, “You’re probably getting some calls, right? What’s going on in the market? How are you feeling here? What can we do to retain you?”
Having those conversations is important, but following through on the following are sure to help boost your retention:
- Upgraded benefits package
- Upgraded Salary
- Increased flexibility in schedule
We need to reward our best people. We need to incentivize some of the people we know have some potential.
Start having these conversations immediately – sit down with your best people. You don’t need to ask them if they’re getting called, because they are, and there’s a reason they’re staying with you. But eventually a call is going to come in when they’re having a bad day or they can’t make a credit card payment, and they’re gonna say, you know what? “I love this company but I think I can get more somewhere else.”
Why don’t you be the person to give them more? The internal hire $16,000 on an $80,000 employee is a fraction of what it would cost you to lose that person.
We hope you got something out of today’s blog. If you’re not sure what you should be doing to retain your employees, or are having a tough time having those conversations, KeyHire is here to help.
Schedule a free consultation with Corey – visit www.keyhire.solutions/consultation