Building Better Employee Loyalty: Five Tips for Tackling The Costs of Turnover

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By Cori Maedel

The days of hiring an employee for life are long gone. As a result, employers need to make an extra effort to retain talent and foster employee loyalty. The right kind of extra effort can go a long way and have a significant impact on the costs of turnover—which can prove critical to a company’s ongoing success.

If loyalty erodes and turnover becomes a problem, it’s more than just company morale that suffers. The bottom line also takes a significant hit from often-overlooked expenses associated with turnover, including: the knowledge lost when an employee leaves; the reduced productivity as they wind down; the job posting fees; screening and interviewing processes; the cost of termination of employment, and the reduced productivity of a new hire as they learn their new role.

Losing loyal employees is clearly an expensive business. However, this isn’t the only reason loyalty is such a vital commodity. Loyal employees are generally more satisfied and productive, and help create a culture of history and stability. They know certain things are done a certain way. They not only know their own job inside out, they likely know other roles too, are happy to fill in where needed and can answer unexpected questions such as how to work the temperamental boardroom TV.

The secret to becoming a company filled with loyal, engaged employees lies in having HR and business leaders who take the time to understand what employees need and provide it for them. This is one reason why the development of coaching skills among managers and employers is becoming highly-valued worldwide.

There’s more to being a good coach though than just saying the right things at the right time. It’s about knowing how to get the very best from people and acting in a way that inspires their trust. As suggested in a recent Forbes article, “Don’t take loyalty and engagement for granted – create a remarkable culture where there are possible and rewarding outcomes of the workplace.”

So in a workplace where cash is no longer king and loyalty is the new leading-lady, what steps can all HR and business leaders take to develop loyal employees?

1. Behave appropriately
Part of being a good coach is being aware of your own behaviour and setting the example for others. As an HR or business leader, you want your employees to look up to you and be proud of you. This means earning their trust by demonstrating a high level of knowledge, skills, honesty, ability and reliability.

Behaving in this way, consistently, will help you earn trust and respect – major steps toward building loyalty.

2. Be open
An often-overlooked characteristic of a great coach and leader is sharing and openness. Often, key data is unintentionally withheld from employees without a good business reason. This might be information that could help improve performance or provide the team with a greater understanding of the strategic direction of the company.

For example, do your employees know if the company met their targets last month, or what the yearly objectives of the organization are? If not, how can you expect them to understand how they can influence its success?

A great coach and business leader who shares appropriate information openly helps quite the “noise” – mistrust, confusion, fear of termination – and enables employees to work productively and efficiently.

3. Provide a career path
Commitment and loyalty are directly related to opportunities for employee development. By offering training you are cultivating commitment. This means providing a clear career path not only for those with leadership promise but, where possible, for all employees.

Share your career path options with employees so that they are aware of what is possible and what support they will receive to achieve success, including how you intend to help them improve where they’re having a tough time.

Employees need regular opportunities and goals to enhance their professional skills. If you’re worried about investing in your employees only to have them leave, you may be surprised to hear it often works in the opposite way. If you help develop their skills, they’re more likely to stay. The results of a recent research paper2 concluded that workers are less likely to quit when promoted within the company. On the flip-side, by not offering training for your employees, you are keeping people on your team who are not being trained. Which would you prefer?

For example, many software developers are keen to gain seniority and experience without shifting into management, so technology companies often offer the opportunity to gain technical certifications rather than assuming everyone wants to be on a managerial career path. In the construction industry, companies may want to put together a very clear path for new employees to show how they can progress from apprentice to journeyman within the organization.

Make sure you coach your managers and provide them with the tools to inspire their teams, to share their expertise, and to offer opportunities for growth.

4. Develop relationships
One of the greatest predictors of whether or not someone will stay in their job is the relationship between an employee and their leader. This doesn’t mean you need to become best buddies with all your employees, but you do need to create a workplace culture that values real people relationships.

For example, encourage your employees to get to know one another. This could include having team building activities, offering employee group corporate coaching, or organizing an annual event.

Above all, showing that you understand and appreciate your employees is a fundamental to their choosing to remain an employee; one of the worst feelings is invisibility—thinking that no one would notice if you didn’t show up one day.

5. Deal with mistakes
When things go wrong, avoid the blame game. Never intentionally reprimand or embarrass an employee publicly. Not only will you lose their respect, but that of the entire team. Instead, if you come across a mistake or a situation in which there was an error of judgement, take steps to correct the behaviour of those involved in a way that doesn’t demean them—or their perception of your leadership.

This means not avoiding these tough conversations or hiding behind the creation of new policy that tries to curb the mistakes in the future. Instead, it involves speaking with the employees one-on-one to help them understand the problem, listen to what they say and set the expectations for the future.

Even better, if you’re able to pre-empt the issue before it arises by setting clear expectations from the outset, you will help gain their appreciation, respect and loyalty.

Summary
As you can see, there is a clear link between the words and actions of leaders and the respect and loyalty of employees. By working on developing your own coaching skills, you’ll help foster employees who enjoy where they work and who they work with.  In doing so, you’ll also help turn the tables on turnover and save countless dollars in the process.

Cori Maedel is presenting Coaching Skills for HR: The Coach Approach in Burnaby on February 5. For more information on this and other professional development opportunities, please refer to BC HRMA’s online calendar.

Cori Maedel is CEO of The Jouta Performance Group in Vancouver. For more information on Jouta’s products and services, including tracking employee leave, call 604.488.8885 or visit www.jouta.com.

1. Fisher, A.  “Executive Coaching – With Returns A CFO Could Love“.  Fortune Magazine, February 19, 2001
2. Wu, W. “Why do Canadian employees quit? Results from linked employee-employer data”. 2012

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  1. This is a great basic list that gets to the heart of coaching – showing you trust your team, and they can trust you! Employees need to know they are in an environment that wants to nurture and engage them, not just make them work as hard as possible. To keep great people, you need to show great support. This post outlines an excellent way to show support to your valuable, hardworking team.

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