Q:  Try as I may I can’t seem to avoid employee turnover. How can I solve this problem?


 A:  Employee turnover is a costly problem in more ways than one. When someone leaves you must replace them. This may entail paying a recruiter a handsome sum and asking the remaining employees to take up the slack until the new hire is selected, trained, and up to speed.

The more important question is why did your employee leave in the first place and what can you do to avoid a similar problem in the future? There are many reasons why people become unhappy in their work. Do you micro-manage? Do you encourage and value their opinions? Do you communicate your vision for the business and do they understand the importance of their roles?

By far the greatest reason people leave is financial. Do you know how your pay scale compares with your competitors?  Let me share with you some ideas that worked well for me in my insurance agency business.

First I made sure our pay scale was at the upper end of the industry.  It did no good to secure a new account if we lost an old one for lack of service.  Accordingly, we did an attrition analysis and determined we needed to cut attrition in half.

To achieve this goal we assigned a specific number of accounts to individual customer service representatives and developed a matrix that tracked client attrition. To the extent we were able to increase annual retention we shared the savings with our CSR’s in the form of a bonus.

We were able to accomplish this goal by anticipating our customer’s every need. If they had a question or problem we tried our best to resolve the issue the same day. If this was not possible we let them know the time frame it would take for resolution. We never promised anything we could not deliver.

We recognized that our employees had responsibilities outside of the work place and instituted flex-time hours that suited both their personal needs and those of our customers. In addition we also offered insurance and retirement savings benefits.

The bottom line is a happy employee is a productive employee. Productive employees are worth every dime you pay them. They keep the customers happy too which makes them tell their friends, thus resulting in referred leads.

In conclusion, conduct a self- examination of your business practices. The problem just may be you.  

About the Author(s)

Gray Poehler is a volunteer with the Richmond Chapter of SCORE, Counselors to America's Small Business.

Business Counselor