Increase Productivity, Not Payroll

While interviewing hundreds of small business owners and employers, I came to realize that their single largest challenge is to find and keep the right employees. In fact, a Columbia University study estimates that replacing a lost employee can cost 150% of that person’s annual salary. That’s a high price to pay, even when the rest of the business is going well.

Fortunately, the root causes of employee turnover are easy to spot – and simple to fix. So how can you increase loyalty at work (I mean, without just paying higher wages)? Here’s the top 5 things I learned from my research:

1. Be a Leader and not a Boss: People don’t like authority. A boss barking out orders and overburdening employees is a classic target for anger and resentment. Adopt a values and goals system that sets direction without dictating detail.  Learn the fine art of delegation.  This will create a much more positive environment at work and your employees will look at you as a role model rather than a tyrannical figure. So lead by example, help them out, pull the rope with them.
2. Let their voices be heard: Engage your employees in workplace issues. Let them voice their concerns and grievances. Let them suggest or recommend alternate methods for better efficiency. Everyone wants to take part in making the rules that they have to obey. More engagement will make them more proactive; feel more important and ultimately more loyal.
3. Keep investing in training: Sure, sometimes training sucks – but I’m not talking about sitting half-asleep in front of a monotone presentation for 6 hours. It is essential to provide the kind of training that results in true personal development for each and every employee. When you teach them better skills, they take more pride in their work, create better results, and feel more loyalty to the team. Training encourages employees to grow with the company and also feel part of it.
4. Team building and bonding: In Japan, where personal relationships and team spirit are paramount, after work socializing has become a cultural norm. Employees and supervisors participate in unique team building activities and socialize together after hours. The same relationship building activities can work in any company: get out of the office and put the focus back on the relationships instead of the work. Building strong personal relationships among team members is one key to worker happiness.
5. Seeing the bigger picture: Employees want to feel that their contribution means more than just a paycheck at the end of the month. Let them see the bigger picture by using open book management: show them why their work is important to the whole company. Emphasize and talk with your employees about their contribution to the system as a whole. Increasing the value added of your employees will bring them more pride and happiness… and ultimately more productivity and loyalty.

Notice that none of these points are “Pay Them More”?  These 5 steps will increase employee loyalty without increasing wages. Improving loyalty will also decrease labor turnover, saving you the additional heartache and expense of re-hiring and re-training staff.  So make your employees happier, more efficient and more loyal by being a team leader, listening and training them, creating human bonds and showing them the bigger picture.

Dedicated to your success, André Spiteri

Guest Blogger André Spiteri  hails from the Mediterranean island of Malta and is a freelance market researcher that specializes in micro businesses. Having spent a number of years into Japan he also specializes in international trade and investment. He has his own blog that deals exclusively with trade and Japan. You can contact him on Linkedin or via email at [email protected]
photo credit: cjmartin via photopin cc