#2 in a series of three articles on Key Employees
Having the right people in the right positions is critical to the success of a business. This is especially true for those who are considered “key” employees, and key employees are critical to a successful exit strategy.
My last blog, Finding and Hiring Key Employees, focused on defining, finding and hiring the exceptional people and talent you need. Once you’ve done so, you’ll want to develop and retain the individuals who will become the anchors of your company.
Employees are people first – individuals with unique talents, experience, education, skills, interests, and needs. These are the reasons you’ve chosen them for the particular roles they fill within your organization.
How to Develop Key Employees
Employees are appreciating assets in which you want to make wise investments, giving them the tools, resources, and opportunities to develop all they can bring to their positions. Consider these “keys” to developing key employees.
- Raise the Bar
- Upgrade your expectations of employees by instilling confidence, trust and believing in the abilities of those you lead.
- Walk the Walk
- Invest time, energy and resources to educate employees on what ownership thinking looks like, feels like and how it performs.
- Be Transparent
- Share as much information and data as possible so every team member knows and understands the score.
- Bestow the authority to make decisions.
- Cultivate gratitude.
- Employees must feel respected and appreciated by leadership in order to have the confidence to step up, speak up and perform up.
The Case for Employee Engagement
Engagement, which manifests as high morale and an emotional and behavioral connection to the job, is critical to retaining employees. Employees who are “highly engaged and thriving” are 59% less likely to look for a job with another organization within a year. But as these statistics demonstrate, engagement is not automatic.
- Globally, 85% of employees worldwide show some level of disengagement
- 67% are not engaged
- 18% are actively disengaged
- 2 out of 3 U.S. workers experience professional burn out at least part of the time
- 23% of full-time employees feel burned out at work “very often or always”
- 44% feel burned out “sometimes”
- Burned-out employees are 63% more likely to take sick days
- Burned-out employees are nearly 3 times as likely to find a new job
Disengagement and burnout can obviously lead to turnover, for which there is always a cost to the company. The typical cost of turnover is 16% for positions earning less than $30,000, but for very highly paid jobs and senior/executive level positions the cost can be as high as 213%. Turnover can also create a loss in productivity – it can take up to two years for a new hire to become as productive as their predecessor. Turnover can negatively impact engagement, morale, company culture, and retention of other employees.
The ways by which a manager relates to employees is key to maintaining engagement. Surveys indicate that:
- Nearly half of workers would leave their position if they felt unappreciated by their manager.
- When a manager is willing to listen to work-related problems, employees are 62% less likely to experience burn
- Mentorship programs can help strengthen employee-manager relationships, but only 44% of companies offer these types of programs.
- Management participation in onboarding is an important component of successful employee development, yet this is done at only 35% of companies.
- When companies spend $1,500 per employee per year on training, they average 24% higher profit margins than companies with training expenditures below that threshold.
How to Engage and Retain Your Best Employees
To retain key employees, demonstrate the value you place on them by cultivating a culture and an environment that affirms that value. Here are some examples:
- Allow them to be part of the team that develops “the vision” – for example, entrust a key employee with developing the 5-year plan.
- Pay them well. Keep in mind how difficult it might be to replace them.
- Incentivize them based on a predefined matrix and/or a “golden handcuffs bonus.”
- Recognize them as often as sincerity permits.
- Create ownership opportunities.
- Keep in mind three key “perks” or areas that are critically important to retention:
- Employee empowerment
- Work/life balance
- Setting the right incentives
Building strong employee-manager relationships, providing regular feedback, and investing in training and culture-building, are critical pieces of the puzzle to reduce turnover and boost retention. Keeping your focus on the person and meeting their needs, many of which are not financial, will provide the foundation for appreciation of this critical asset and a great return on your investment in key employees.