For small business owners employee attrition is a fact of life. It is estimated that the annual attrition runs as high as 100% for some types of small businesses; particularly the ones that employ hourly workers! This means that you will not have the same set of employees at the end of the year as the ones you started with. This kind of turnover not only increases your cost in the form of hiring and training; but it may also reduce sales by affecting the quality and customer service.
While you can try to keep your employees motivated and use these techniques reduce turnover; the fact remains that the employee turnover will remain high if you are in type of business that employs hourly workers. My brother, who owns a coffee shop, complains that he always fears a call from an employee who will call him to say he is not going to show up for work because he has found another job. It always happens when he is not able to find any replacement on a short notice forcing him to rush to the business from wherever he is.
While you will not be able to prevent your employees from leaving on a short notice; the next step is to try to mitigate the impact on your business as a result by taking certain steps beforehand. Below we have outlined some steps you can undertake that will help you take care of business even when your employees leave suddenly.
- Cross train employees. Most small businesses will have various positions for which they will hire different types of people. For example, a pizza restaurant will need delivery drivers, food preparers, servers and managers. While it is a good practice to have different employees take care of their assigned tasks; you should cross train them to do other tasks, when needed. This way you can use them to do other tasks when you are running short of employees in those positions.
- Have a backup plan. Make sure you let all employees know that they may be asked to help out in case of “emergency” even though they may not be on schedule. Having a backup plan will ensure that you will have the help needed when someone leaves on a short notice and also when you are suddenly faced with a rush of customers.
- Mandate 2-week notice. You should make it a policy to require employees to give minimum 2-week advanced notice if they are leaving. This will give you enough time to hire and train the replacement.
- Provide long-term incentives. This technique does not immediately help with the situation when someone leaves on a short notice. However, it helps by reducing the turnover in the first place. It is not legal to withhold salary of employees; however it is legal to give them bonus that they are able to get only after they have stayed on the job for certain period. Large companies provide stock incentives and other bonus to their executives that become vested after certain years. If they leave early they stand to lose it. This will make your employees think twice about leaving their job.
- Be prepared to stand in. If all else fails; just be prepared to rush to your business on a short notice. Make sure your family is aware of it and understands the need. After all, it is your business and money that is on line.
How do you plan for employee turnover? Any ideas you can share with the readers?
