4 Steps to Mitigate High Employee Turnover Costs

At every company, there are employees at its heart and soul which keep the company thriving and moving in the right direction. They are well educated, knowledgeable, and possess the ability to communicate with and motivate employees. They often possess specialized skills or knowledge which has been learned from years of experience.

In the modern small business, high employee turnover is often a reality as top employees are difficult to find and retain, but often even more difficult to replace. The retention of these employees is vital to any business, and in an ideal world, companies would have the resources to motivate and the means to retain these key employees.

However, they often leave unexpectedly and when they do, they leave many companies woefully unprepared as these key employees take with them a wealth of knowledge and a bundle of human capital. Many small companies neglect to plan for the loss of key employees until it is too late or do not give enough thought and effort to retaining these employees. 

Throughout my career in small business I have been on both sides of this situation. I have had had to make the difficult decision of resigning from a position where I was a key employee. I have also been called into an emergency situation to replace a terminated employee on short notice.

In both situations being unprepared for the situation was challenging, complicated, and the pain could have been alleviated with proper planning.

This commentary will discuss the steps and the processes which can be put in place to help a company prepare for these changes.

1. Identify key resources within the organization who can be trained or mentored to prepare for future roles.

This is often the easiest and best way companies can prepare for the loss of key employees. While this can be a successful way to prepare, many small businesses lack the resources of having spare employees available.

This leads many companies to search for external resources which may lack company or industry knowledge. This can often be a challenging process, using valuable time and effort, which is not often available.

2. Have employees document and translate their regular processes into standard procedures.

These processes could be picked up and used to continue operations in the absence of key employees. Small businesses should document “Standard Operating Procedures” or processes to help create consistencies while the employees are present.

Key employees often hold knowledge about the processes, structures, and methods of operations about the business which help them to create efficiencies and prevent mistakes. The documentation of these processes will allow future employees to continue the workload and shorten the learning curve.

3. Cross train employees in key roles so more than one person can be trained in the essential tasks and day to day operations.

While this may not be a long term solution it can allow a company to maintain successful operations in the absence of key employees. Cross training helps companies to redistribute the work and keep the damage caused by the loss to a minimum.

4. Implement a recruiting program to draw qualified candidates and to assist in the rapid replacement of employees which leave the company.

Even when things seem to be going well and employees are happy, it is important to develop and maintain communications with qualified candidates.

In the ideal situation, companies are able to find and retain first-rate employees, but sometimes no amount of incentives, training, motivation, promotion, or resources can guarantee keeping those key employees; and future success can often be driven by planning for high employee turnover. Don’t wait until a crisis strikes your business to begin preparing for the future.

It is best to plan ahead and develop a succession plan while your business is stable and sound, rather than being forced into making a hasty decision you could regret. It’s inevitable that employees will leave the company, however having a succession plan and process in place can help ease the pain of high employee turnover, and get the company back on track.

Written by:
Brian O’Connor
TGG Accounting
 
 
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