A comprehensive business strategy is not complete if it doesn’t include a proven retention plan for your existing employees. This is a fact that Peter Tuvey, co-founder and CEO of the UK’s first revenue-based finance provider Fleximize, is well aware of. With eight of his current employees following him across his three business ventures to date, Peter believes that establishing close relationships with staff members is vital to the success of any company.
Staff turnover costs British businesses a whopping £4.13bn every year, with new employees taking up to eight months to reach optimum productivity levels. On average, the cost to employers of replacing a single member of staff is more than £30,000, according to analysis from Oxford Economics.
Meanwhile, a CareerBuilder survey showed that 45% of employees plan to stay with their employer for less than two years. Brexit also resulted in a 73% spike in ‘rest of the world’ job searches, while searches for jobs in the EU were 2.5 times higher in the immediate aftermath of the vote.
Separate research by the London School of Business and Finance found a quarter of Brits regretted the profession they had chosen. For ‘millennial’ workers aged between 18 and 34, that figure hit 66%.
You’ve probably heard it before, but there’s more to look for when hiring someone than the contents of their CV. Instead of a formal interview, it can be far more effective to organise a breakfast or an afternoon coffee. Interviewees relax in more informal settings, and it can be a great way to get to know the person behind the CV.
Ask yourself the following questions. Will they enjoy the atmosphere of the company? Are they likely to fit in with the staff you already have? Does their sense of humour match with your current employees’? These may be small things but they are a vital part of assessing how long a potential employee might stick around, and whether they’re likely to integrate well into your ‘business family’.
By creating an open and honest environment, it will make the office feel like a “home away from home” where employees can feel comfortable. Encourage your employees to be direct with you about what they think, and don’t react badly to negative feedback. It’s far more productive than letting problems stew until a notice is handed in.
Employees that feel heard also feel valued, so it’s important to react productively to staff feedback. As recent studies have shown, while the majority of managers (69%) said they are ‘always giving feedback’ to their staff, just 23 per cent of employees agreed.
It was a little-known inventor named Steve Jobs who said: “It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.” So, dissolve the hierarchy when it comes to creativity. If you value your juniors as much as you do your seniors, people can and will surprise you.
This is all particularly important in the current climate where wages are mostly stagnant, according to recent analysis. Companies in the past have spent astronomical amounts on financial incentives for their staff, but all the research suggests that there are much more effective ways to motivate people, even on a shoestring budget.
Indeed, as more and more young people enter your business, you may be interested to know that when PwC asked their millennial employees (80% of their workforce) how they liked their work, over two-thirds expressed the desire to work from home occasionally and have flexible hours. Research also suggests those allowed to do so quit at half the rate of those without these benefits.
Work is changing, and businesses need to adapt with it or be left behind. Technology has opened the door to many in-house benefits that cost employers very little. Letting your employees balance life and work can not only empower and motivate your staff, but a happier work/life balance is also believed to improve productivity and profit.
The UK has long suffered ‘alarmingly low’ productivity rates. These cost-effective changes to your business can go further to retaining your staff and keeping your business at the forefront of its industry.
Launched in 2014, Fleximize offers small business loans from £5,000 to over £1 million, and has supported a wide range of SMEs across the UK. To date, the company has lent over £60 million to businesses in a number of sectors.