Employee Retention: An Asset, Not A Cost

As a small business owner is there such thing as a perfect team? I don’t know what your definition of perfect is, but to me, when a company has a perfect team, it has:

• All of the technical skills needed to run the business.
• A mix of people that all match and enhance the culture you wanted to create.
• Depth in each position so that if someone leaves or is sick, there is more than enough talent and capacity to get all the work done.
• Unity in the goals and mission of the business.

The worst problem for a small business owner is a revolving door of employees. When we lose one of our 5-10 person office, we are losing a double-digit percentage of our team. And how many small businesses have depth in each position to cover the unplanned hole?

And why is every hole unplanned?

There are usually warning signs all over the place when someone quits. It is rarely a total shock that we couldn’t see coming.

And how many times have we known ourselves that a team member was a poor fit for many different reasons, but because we are thin in staff, we ignore it? We don’t want to have a hole, planned or not, so we live with the problems.

Those too are warning signs.

It truly can become a double-edged sword:

• They realize they are a poor fit and leave, creating a hole.
• You realized they are a poor fit and keep them, creating a problem with the rest of the team, customers, or vendors….and eventually lose someone.

The Cost of Employee Retention

Why do we ignore the warning signs and end up with the gaping hole? In all of my discussions with business owners, I would say the most common reason that we play whack a mole with open positions in our companies, is perceived cost.

It costs more to have to recruit and hire someone else.

It costs more to hire depth and have more staff than you need.

It costs more to give regular raises and to have a lot of benefits.

It costs more to hire in advance of growth so that you are ready for it.

It costs more to have overlap for planned holes so that the replacement can be fully ready and trained to take over.

It costs more to do it right.

Until we avoid the warning sign and have the domino effect of open positions. What is the cost of waiting and managing around holes? It does depend on the position, but it is almost never a gain.

When we wait too long and have unplanned holes in our team, it really costs more!

It costs even more to hurry up and hire – we spend more on ads, we interview anyone and everyone, and we increase the chance of making a mistake in our haste and perpetuate the problem.

It costs more when we turn down a job because we do not have the team to execute well.

It costs even more if we take the job and do it poorly causing us to get fired or never be hired again.

It costs even more when we burn out the rest of our team because they are always having to cover a hole that may or may not be in their area of expertise.

It costs even more to get our newest new person onboarded and trained.

It costs even more when our new employee isn’t efficient yet and impacts our margins.

It costs even more when we as owners are stressed, filling holes ourselves, and distracted from what the business actually does to create quality work.

Which Costs More?

At any given position, and point in time, it may feel like a toss-up. But, I promise, over time, over the life of your business, having strong employee retention not only saves you money, but it also makes you money.

For a small business to scale, having a strong, trained, resilient team makes all of the difference in the world. By building a team of talent that believes in what the company is doing, is motivated to be a strong contributor, and has learned your business and services, you will grow with less pain. Customers will be taken care of and will buy again and again. They will tell their friends and colleagues about your company.  

Your employees will tell their friends about their job and help recruit for you.

Your stress will be reduced because you are growing with a solid foundation to support you.

It is short-sighted to think about your team as an expense, rather than an investment. Even support staff enables other team members to take care of revenue-generating activities.

The first step in employee retention is to think of every employee as an asset, not a cost.