Determining the biggest challenges of entrepreneurship, you will see that employee retention and development of new products and services happen to be the most challenging issues entrepreneurs encounter throughout their venture.
The main problem is that focusing on financial matters does not help retain employees since it does not make your company exceptional. There are many firms that can offer competitive salary and incentives, making it easier for employees to jump from one job to another for better pay.
This issue was first discovered by some top companies such as Silicon Valley firms in the period of 80s to 90s when tech began to prosperous in the market. Employees observed all the firms in the Valley as a huge enterprise and they jumped from company to company depending on the challenges in the workplace or devotion to someone they liked working with.
The same practice is still going on in the technical ground for every team of product development individuals who move together to another company. They mainly do this because of the working partnership they have developed together.
Besides reporting the above data, the magazine has provided a sidebar, explaining the ways to take care of horrifying problem of employee retention. With a great headline that reads as “Make your Employees Matter”, the content offers modest retirement plans and allows key employees to share monetarily in the business’s growth.
The gallup organization interviewed 30,000 successful employers about their strategies to keep employees satisfied. They revealed twelve different workplace characteristics that good managers consistently make use of to motivate and retain their talented employees. Surprisingly, they did not mention anything about money or any sort of financial reward on that list.
Instead, good manager make sure that their employees:
- know what is expected of them.
- have the correct means to do their job effectively
- get the opportunity to do what they do best on a daily basis.
- receive praise or acknowledgment for good work
- know the importance of their job based on the objectives of the company
- work under supervisors who take care of their needs as a human
- have best companion at workplace
- are talked to about their regular progress
- get opportunities to learn and grow further
- are encouraged to chase self-development
- get value of their opinions
A study perceived that employees do not quit their jobs, they actually leave their bosses. What we understand by all this is that an employee loves to retain their job in an environment where they enjoy and respect their manager. They have a great association with that person and the others with whom they work. In fact, employees’ loyalty to their work is actually about devotion to the persons they work with. Entrepreneurs can better deal with their entrepreneurial challenge by making their workers feel important in a very personal way – quite reverse the traditional rules.
Common Reasons Behind A Company’s Failure in Employee Retention
The report on employee retention from Entrepreneur Magazine uncovers many common reasons why a company fails in retaining its key employees for a longer span of time even when these efforts are made by talented individuals.
Lack of assessment is the main factor why managers choose ineffective solutions. In order to quickly fix an expensive problem, some companies often do not conduct a relatively brief and cost-efficient evaluation to correct the situation in a better way. Hiring a new employee without assessing who is leaving and why often results in incapable way of solving the root cause.
Likewise, some managers usually brainstorm many possible solutions and implement those chosen by top administration. At this point, the most important thing is to choose and implement limited solutions that are most effective to solve the problem. If you implement lots of solutions including good once, they are most likely to drawn-out your resources, deteriorate your efforts, and risk your chances of success.
Managers have got to discover the ways of assessing success to know what ideas work in their favor. They need to know which employee retention solutions they have implemented so far are working successfully and which are not. Similarly, it is vital to define where managers need to make modifications and what tactics they should drop if they really do not have a technique to measure their results.
Training and Development Can Also Help Retain Key Employees
Human resource is considered to be one of the critical components within an enterprise to drive productivity, efficiency, and competitiveness. Realizing the great significance of human capital, most firms undertake employee training and development to produce a flexible, highly motivated, and accomplished workforce which is also efficient and strong at the same time. This is equally beneficial to generate a competent employee who is capable of retaining valuable customers hence can boost sales and market share.
In order to develop professional employees, successful entrepreneurs invest in training and education programs for their workers, helping them benefit from that tremendously. As a matter of fact, many employees work along the fear as stories of lay-offs keep doing the round. There are also some individuals who think that workforce motivation and retention is not something really important. Interestingly, its opposite approach goes true. If a firm, for instance, has gone through tough times and has made several tough decisions, it is likely that employees with payroll are still found working harder than before.
This sort of continuous stress can affect employees’ moral significantly. For that reason, when the economic situation recovers at any point of time, workers who stayed with the company in their tough times will be the first ones to leave. As a consequence, a company is always at the risk of losing their most dedicated and talented employees just when they need to concentrate on rejuvenation.
Providing employees the opportunity to grow and develop career improving skills through training and development programs has an important role to play in employee retention. The main reason behind this is employees’ desire to retain their effectiveness in the marketplace all the time.