Companies in hourly workforce-intensive industries like retail and foodservice tend to have a knee-jerk response to high turnover: it is what it is. Raising hourly rates competes with keeping prices low, which is a major draw for customers. Throwing money at employees is not going to buy you customer love. There is a way, without raising pay, to keep your employees invested in their work so they don’t become disengaged and start weighing down the bottom line with their poor attitude and performance.
Here are the do’s and don’ts when attempting to increase employee engagement and reduce turnover:
- DO change your perspective on hourly positions from “job” to “career.” When you adopt a culture of promoting from within, entry-level employees won’t see themselves as entry level for long. They’ll perform in a way that will earn them a promotion. Chipotle has set the goal to hire 100 percent of their managers from within the company, and they have a career path to help employees get there. As a result, hourly manager turnover has dropped from 111 percent to 47 percent.
- DON’T forget about education. When employers invest in their employees through job training, it leads to a sense of achievement and growth. An Arnold Worldwide study showed that the average Starbucks barista receives more training in a year than the average employee in a communications company. It’s no coincidence that Starbucks enjoys a lower turnover rate than the industry average – 16 percent for full-time employees and 60 percent when the average includes part-timers.
- DO empower employees. How can you build a solid culture if you don’t let your employees have a say? At Whole Foods Market, employees work for 30 days before their team members vote on if they feel the employee is a good fit and should stay. Not only are you involving your employees in the decision-making process, but you’re also creating a team that will work together well from the start.
- DON’T underestimate the power of the discount. Some employees choose where they work based on the discount alone. Employee discounts have become common place, but can you make the discount more attractive for employees with longer tenure? Victoria’s Secret starts employees with a 20 percent discount that increases to 30 percent after two months.
- DO accept the need for change. It can be hard to hear, but your current people strategy may not be working. Reach out to your employees and ask for help. RadioShack formed an employee task force that selected nine key areas for improvement and provided recommendations for positive changes. By implementing the task force’s suggestions, RadioShack saw turnover rates decrease by 11 to 22 percent in one year.
You DO have other tools at your disposal besides across-the-board pay raises to increase employee engagement and decrease turnover. DO give one or more of these tips a try, and DON’T let your strong employees get away.