Protect Your Human Investment

Basic Business Cents

Protect Your Human Investment

Many people say your employees are your most valuable asset, but Dr. W. Edwards Deming used to say employees are not an asset that can be bought and sold like a commodity. He would say they are a treasure that must be protected at all costs. After all, you spent considerable time and money attracting and training them, coaching them in how to be successful in your business and sharing your dream.

Turnover of employees is very costly. Harvard Business Review in October 2010 quoted one company as saving nearly $50 million dollars by improving their retention rate from 65% to 85%. A company that I know claimed to save $300,000/month by reducing their turnover rate. These are big numbers for big firms, but you can see the potential savings in improving the retaining employees is huge for any size organization.

There are times when we err by hiring the person for a position for which they are not suited. In that case, we need to admit our mistake and find them a position for which they can be successful, either inside the organization or outside. After all, you made the mistake in hiring and you owe it to them to help them find the right spot.

There is no magic recipe for retaining employees; just a lot of little things. For one, place them in positions where their skills and talent will allow them to succeed. Give them work processes that are simple and effective. Managers should understand that their job is to manage and improve the processes and not micromanage the people. Training needs to be provided to enable the employee to be successful. Remember, worker training worker informally may be like the old child’s game where you whisper something in someone’s ear and they in turn whisper it to the next person. By the time it gets around the room, the message is nowhere near what was started. You need formal, standardized training.

The new employees want to be successful and to get satisfaction in their work. The manager must coach them to help them improve, use positive reinforcement, be a supporter (not a critic), and be a role model. Good management shares the credit for successes with the employees and provides resources needed to do the job.

Enlightened management will share the organization’s vision and strategy and then listen to input from employees. Communication has two parts, sending and receiving. Receiving may be more important.

Dr. Deming has another saying that is appropriate in our work, “Dogs like a pat on the back and people do too.” By helping employees attain pride in their work, we are not only going to have better employees, but they are more likely to stay with the organization long-term.