The UK average employee turnover rate stands at around 15%, although that figure fluctuates depending on what study you look at. That does not sound like a terrible figure – does it? Well, if you consider the average number of employees for a small business is 10, that is 1.5 employees lost a month, so we will round it up to 2. The cost of replacing one employee in the UK is £50,000 – which accounts for their entire first year of employment.
So, effectively, small businesses are spending up to £100,000 because of their ‘employee churn’, a term used to describe the number of employees leaving at a given point in time.
Since employee churn equals costly financial implications, what are they demanding in return for undisputable loyalty? Let us explore.
A study in 2017 found that 81% of people were looking for another job. Interestingly, money is not what it is all about. 74% of employees would take a pay cut if it meant working in their dream job, and 23% do not need a pay rise to take on a new role. What do they need? They need to work in a recognition-rich culture that focuses on employee engagement, which has been proven to boost a business’s profitability by 21%.
There is no better way to improve employee engagement than to look at employee engagement strategies offered by an employee engagement agency. Incentive Smart offers a comprehensive high-reward-based employee loyalty programme that helps to improve communication, provides an area for feedback, and creates a place for positive reinforcement. You can find more on their website www.incentivesmart.com. Working with an incentives scheme agency helps employees to feel energised, motivated, and willing to work.
You can invest in employee engagement, but without taking the time to invest in the happiness of your employees, it will be hard to unlock the true potential of an employee reward scheme. A study carried out by Workplace Insight found that only 46% of employees are happy most of the time at work, and 26% are rarely ever happy.
Happiness and positive vibes are infectious and can infiltrate an entire company. Just look at Google the reviews of what it is like to work there, and you will realise the potential of a happy workforce. How has Google consistently ranked as one of the best companies to work for? Innovation.
Google was one of the first companies to introduce nap rooms to their offices. If you have ever felt that afternoon office slump where even matchsticks would struggle to keep your eyes open, you will know how happy the option of a quick nap would make you. They have ideas and mood boards on the walls, indoor slides, bikes to get around, relaxed clothing requirements, the freedom to come and go as long as work is completed, and the list could go on.
They have broken free from the structured corporate mould and redefined what it means to be a 21st-century brand. And, employees want just that. A space to be creative, open, without pressure, and with flexibility.
It does not get much more pre-21st-century employee management than micromanaging. Micromanagement is a style of management where an employee is closely observed or controlled, to the point it can feel overwhelming, yet it is still a regular occurrence. Micromanaging happens when there is no trust between the manager of their employees, and it leaves employees feeling stressed and devalued.
The trouble is, 71% of employees say micromanaging interferes with job performance, and 69% of employees would actively look for another role. Find a balance between management and allowing employees to use their own initiative.
Remove the performance pressure unless there is a reason for it, say if an employee is significantly underperforming. If they are, consider a buddy support system with another high-performing employee. It is a less invasive management method and can be highly motivated and educational for an underperforming employee.
Finding the sweet spot that keeps every employee happy and loyal is a tricky skill to master. Fostering a happy and inclusive working environment helps, as well as incentives, company days out, and a general openness to discuss problems. The more time you invest in your employees, the more they will give back.