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#37 Employee Retention. One Problem, multiple Views

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Winning the Game of Employee Retention | Claire Kemp | TEDxSevenMileBeach

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Business That Have Had Low Retention Rate

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Business That Have Had Low Retention Rate

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When employees enter the workforce today, they no longer expect to work for the same company until they retire: the average employee tenure at a given job is about 4.2 years, and 65 percent of people in the workforce feel that they could find a more engaging position with higher pay and benefits. Many employees also switch jobs if they're seeking a more positive company culture or opportunities for growth.

It's easy to see why the vast majority of human resources departments say that improving employee retention has become a high priority. Several major food and beverage brands are already leading by example. By offering great benefits packages, fun on-site perks, development opportunities, and fostering company cultures that bring employees together, these companies are lowering full-time turnover and boosting retention rates.

1. Starbucks
Compared to many other companies, Starbucks has a relatively high turnover rate of 65 percent for full-time employees. But in comparison to other quick-serve restaurants, their efforts toward better employee retention have paid off - the average turnover rate in the industry ranges between 150-400 percent. Starbucks keeps long-term retention in mind from day one of the hiring process: employees report positive, welcoming interview experiences, they enjoy a relaxed dress code on the job, and they get to participate in the Starbucks Partners program by sharing their days on the job on the company's Snapchat. Starbucks also provides plenty of concrete benefits that other restaurants in their sector of the industry don't always offer. Eligible full and part-time employees can receive tuition reimbursement for online education programs, get health benefits and paid time off, and take advantage of the discounted stock purchase plan and equity reward program.

Mars is a 100 percent family-owned company, and loyalty to the company seems to run in families, too: several families have worked for Mars for generations. For more than 100 years, Mars has been manufacturing a wide variety of food and beverage products, including candy, snacks, and dog food, and their employee turnover rate currently stands at a mere 5 percent. Company benefits like healthcare, paid time off, sick days for full and part-time employees, and tuition reimbursement kick in from day one for new employees. They also allow telecommuting, encourage employees to participate in a variety of wellness programs, and employees can even bring their furry friends to the workplace. The commitment to the five Mars principles, "Quality, Responsibility, Mutuality, Efficiency, and Freedom" keeps employees on the job long-term, and the free M&Ms certainly don't hurt, either.

3. General Mills
The massive global company General Mills has their logo on everything from baked goods to breakfast cereals to canned soups, and they own major brands like Betty Crocker, Yoplait, Nature Valley, and Pillsbury. They've been in business since 1928, and they're known for their impressive low turnover rate of 3 percent. Half of all General Mills employees have worked for the company for a decade, and 3,500 have been there for twenty years or more. The keys to their success with employee retention are the opportunities for growth within the company: 80 percent of management roles at General Mills are internal hires, and younger employees know that they have plenty of room for advancement. They also offer solid benefits like compressed work weeks, paid sabbaticals for long-time employees, paid time off for volunteer hours, and tuition reimbursement.

4. FONA International, Inc.
FONA International creates unique new flavors for food, beverage, and supplement companies, and employees are always analyzing industry trends and getting creative with new flavor profiles. FONA offers 100 percent company paid health coverage for employees and their dependents, flexible scheduling, family leave for mothers and fathers, tuition reimbursements, and an annual 40-hour training and development benefit, all of which contribute to their low turnover rate of only 6 percent. But FONA really stands out when it comes to company culture. 99 percent of employees at FONA say the company makes a positive contribution to their community, and 98 percent say that they enjoy "special and unique benefits" and regularly celebrate special events.

Interested in working at an innovative food or beverage company? Explore our BevForce and FoodForce job boards or speak to one of our Executive Recruiters for more senior-level opportunities.
Photos Courtesy of Facebook

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4 Global Food & Beverage Companies That Have Cracked the Code On Employee Retention

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When employees enter the workforce today, they no longer expect to work for the same company until they retire: the average employee tenure at a given job is about 4.2 years, and 65 percent of people in the workforce feel that they could find a more engaging position with higher pay and benefits.

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Other Problem That Arise In Small Businesses 

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Other Problem That Arise In Small Businesses 

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Intuition might suggest that it's harder to hire someone than to keep them.

But according to new research of more than 600 US businesses with 50-500 employees, 63.3% of companies say retaining employees is actually harder than hiring them.

This means, in spite of our tight job market-or maybe because of it-businesses see a greater struggle to keep the employees they already have, than to find new ones.

Tight job markets are characterized by low unemployment rates and tapped talent pools. This makes finding qualified workers hard. But more importantly, this turns the market into an "employee's market," where it's easy for employees to find a new job, among the piddling of qualified applicants per job listing.

Perhaps it's natural, then, that employers are struggling to keep workers and an overwhelming majority (81%) of businesses agree is a "costly problem."

If businesses can't maintain basic staffing needs, it impacts their ability to service their customers.

Delays to customer products or services was the #1 impact of losing employees (24.5%) according to survey respondents, followed by loss of productivity (21.1%) and then the issue of the costs to re-hire and onboard employees (17.2%).

Smaller businesses can't afford to under-service their customers.

The consequence of under-servicing clients or customers at small or mid-businesses is far more severe than larger companies. This is because the loss of each customer represents a greater proportion of their customer base and thereby revenue.

If you only have a handful of clients, and you lose one, well...

It's not as if business leaders are ignoring the turnover problem. No, 53.2% of survey respondents have increased employee recognition, 51.4% provide salary increases or raises, and 41.3% provide benefits all in the name of boosting retention rates.

But still, nearly 1/3 of employers expect their average employee tenure to be less than a year.

Companies, especially in today's economy, need better retention if they're going to grow, scale, and become more profitable year over year.

How to retain employees, longer

To boost employee retention rates, employers must create a place of work that people enjoy day in and day out.

To do this, consider the kinds of workers you want to attract, what those types of people are incentivized by, and marry that to what your business can provide. There are myriad ways to provide perks, better working conditions or incentives to staffers. For instance, you could offer scaling salaries based on tenure, shares in the company, or earned flexible work arrangements.

These are just a few.

For more, check out The Turnover Prevention Checklist. This list includes 15 real-world examples of how businesses have used the tactic to boost retention, as well as a quick "how-to" guide on how to put each tactic into action in your business.

It's a win-win for you and your staff.

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Data Shows Employee Turnover Is Bigger Challenge Than Hiring

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Intuition might suggest that it's harder to hire someone than to keep them. But according to new research of more than 600 US businesses with 50-500 employees, 63.3% of companies say retaining employees is actually harder than hiring them.

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Did you know that 64% of today's workers are regularly job-hopping? According to a new survey by staffing firm Robert Half and another by the Gallup Institute, 21% of millennials, the largest segment of the workforce, say they've changed jobs within the past year.

Employee turnover is on the rise and workers are switching jobs now more than ever. As an independent business owner, turnover negatively impacts the profitability and productivity of your company. While some level of employee turnover is inevitable, it is important to take steps to boost your retention of good employees.

Below, we will provide a few gems you can offer employees that will encourage them to stick around, but first, let's talk about what higher turnover could be costing your business.

The Real Cost of Employee Turnover

The unfortunate truth is that employee turnover is expensive. A report from The Center for American Progress shows that the typical (median) cost of turnover was 21% of an employee's annual salary. In other words, for a Full-Time Employee (FTE) making $12 an hour, his or her departure will cost the business owner $5,250 in lost productivity and replacement costs on an annual basis.

In addition to spending thousands of dollars to replace an employee, there are also less obvious ramifications of turnover, like reduced productivity. According to The HR & Employee Engagement Community, about 30% of companies said that it takes a year, or longer, for a new employee to reach the full productivity level of a departing employee. Therefore, high employee turnover means having many inexperienced employees, which will eventually lead to lower employee productivity.

Companies with a smaller number of employees will find it is even more difficult to bounce back from the loss of an experienced employee, productivity-wise, negatively affecting client satisfaction and their bottom line.

So how do you reduce employee turnover?

Step 1: Diagnose Why Employees are Leaving

To improve employee retention in your business, start with an accurate analysis of what employee turnover looks like.

1. Determine your turnover rate The turnover rate is the number of people who leave an organization and are replaced over a fiscal year. Here is asimple formula to help you calculate the rate and consider different scenarios, like how many new hires you are losing within a given year. According to the U.S. Bureau of Statistics, the average turnover rate in the U.S., across all companies, is about 12% to 15% annually.

2. In which areas of your business do you see high turnover? Are you generally losing employees in retail sales, marketing, or other specific departments?

3. Are external factors affecting your turnover rate? Is there high turnover across your industry? What about in your region? Do your employees have specific skills that are in-demand? Is the unemployment rate a factor?

4. How does turnover affect your organization? This could include the cost of an employee leaving, costs of rehiring and training, HR time, a negative hit to morale, and lost profits due to low productivity.

Step 2: Look Internally to Find Out Why Employees are Leaving

After the steps above, if you determine that you do have a pretty high turnover rate and it isn't caused by external factors, look internally to see where changes can be made.

Ask yourself these questions:

Do your employees feel valued?

Are there opportunities for growth within your company?

Is your management team causing the issue?

Do you offer incentives and rewards for good work?

Are you offering the right health benefits?

Step 3: Think about Employee Benefits

56% of U.S. adults with employer-sponsored health benefits said that their health coverage is a key factor in deciding to stay at their current job, according to a survey from America's Health Insurance Plan (AHIP). If you are losing employees, not offering benefits could very well be the reason why they are leaving.

If you already offer health benefits to your employees, please be aware that if they don't feel it is affordable it may have a negative impact on your retention. Fifty-two percent of employees who aren't satisfied with their benefits reported that they want better benefits, and 14% want different benefits altogether.

Providing solid health benefits or improving them is clearly important to retention, but there's another benefit as well. Offering a good health insurance plan could also lead to healthier employees, which means fewer sick days and higher productivity.

Step 4: Lewer Can Help

Health insurance is a particularly important benefit to help improve employee retention. The team at Lewer Benefits Group can create a customized benefits package that meets both your budget and your employees' needs. Running a business is hard enough without having to recruit and train new employees all the time! Contact us today for more information.
#BuildingBetterBenefits, #LewerBenefitsGroup #CostofTurnover

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How to Reduce Employee Turnover in a Small Business

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Did you know that 64% of today's workers are regularly job-hopping? According to a new survey by staffing firm Robert Half and another by the Gallup Institute, 21% of millennials, the largest segment of the workforce, say they've changed jobs within the past year.

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Coffee Industry Has One Of The Highest Retention Rate 

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Coffee Industry Has One Of The Highest Retention Rate 

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Top Reasons Employees Leave

Employee turnover is expensive, time-consuming, and bad for any business. Yet, food, beverage, and hospitality businesses face a far lower chance of retaining their employees than companies in other industries. Turnover rates at restaurants and hospitality companies topped 70 percent every year since 2014, according to the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS). In 2018, that rate rose to nearly 75 percent - the highest since the Great Recession. That's a big deal when you compare it to other private sector jobs, which average annual turnover rates of around 46 percent.

An employee's decision to leave their job is personal - unique to each individual and their experience in that position. However, people often leave a job for one of these common reasons:

Lack of Training: Without proper training, employees may feel lost and unprepared for their role. Ultimately, this can set them up to fail.

Different Work Than Expected: If the job doesn't match the initial description, you could soon face an unhappy employee.

Issues With Management: This can lead to a lack of respect for the business and its policies. If these feelings spread among your staff, they can lead to a toxic workplace.

Lack of Communication: Businesses that fail to clearly communicate with employees about expectations and workplace changes miss the opportunity to engage workers in conversations that likely would increase their company loyalty.

Lack of Qualifications: Someone underqualified for a position may experience constant feelings of stress in that role.

Determining Your Turnover Rate

The process of replacing employees is both inconvenient and costly. Losing a frontline employee costs a business an average of $5,864, according to the Center for Hospitality Research at Cornell University. Most of this cost stems from lost productivity while the position remains vacant.

Before you can implement strategies to boost your employee retention and measure your progress, you first need to know your starting point. Follow these steps to determine your business's current turnover rate:

1. Divide the number of employees who left your coffee shop recently* by the average number of employees you need to operate with a full staff. (*This could be at the end of a busy season or during the last six months - use whatever's appropriate for your business.)

2. Multiply that number by 100 to calculate your current turnover rate as a percentage.

Determining your turnover rate can help you assess how much of an issue turnover really is in your cafe. It also provides a baseline against which you can measure the success of the steps you take to reduce turnover.

Tips for Reducing Turnover and Improving Workplace Quality

Once you understand why your employees left, how do you prevent it from happening again? Follow these tips to start lowering your turnover rate and enhancing your employees' overall experience at work.

Hire Mindfully

Hiring isn't a perfect process. A candidate that interviews well doesn't always become a great employee and vice versa. However, optimizing your hiring process can help you minimize turnover and increase your retention rate. To do that, you should:

Rethink Your Vetting Process. Don't just look for employees with the most experience. Sometimes, the best baristas are those who learn how to make coffee in a way that best suits your shop's specific needs. It's also much easier to train a beginner than to convince a seasoned barista to unlearn bad habits.

Ask the Right Questions. During the interview process, asking the right questions can give you insights on how your candidate will work within your business. A few good questions to ask include, "How do you respond to criticism from management?" and "How did you reach out for additional responsibility in previous jobs?" You also may want to ask applicants about how they function as part of a team.

Share Your Employee Handbook and Expectations Upfront. From your dress code to policies regarding employee conduct, clearly convey your expectations of employees with job candidates during the hiring process. Have each staff member sign a document that acknowledges they received and read your employee handbook to encourage them to hold themselves to that standard.

Implement a Grace Period. Finally, implement a grace period of 60 to 90 days. This will give each new employee time to settle into their role while you assess their fit within your business. Once an employee's grace period ends, conduct a check-in meeting with them to discuss how things are going and next steps.

Offer Benefits

While challenging for many small businesses, offering benefits - if you can do so - will improve your employees' quality of life and give them an incentive to stay. For cafe roles, employee benefits typically include medical, dental, and vision plans as well as paid time off. Here's how you can make employee benefits advantageous to both you and your team members:

Offer Health Benefits to Full-Time Employees Only. How you define a full-time employee will depend on your company policy, but this benefit provides a pretty good trade-off. It not only helps you reward employees for their dedication, but also encourages them to clock more hours in return for a health care plan.

Require a Grace Period Before Providing Benefits. Implement a grace period that all new hires must work before they qualify for employee benefits. This will give each of them time to settle into their new position while you decide if they're a good fit for your business. Three months is typical for this type of grace period because many employees who don't plan to stay long term will jump ship during this time.

Offer Paid Time Off, If Possible. If you can afford to offer paid time off, do so because it's a great employee motivator. Many small businesses will offer a week of paid time off as a holiday or annual gift. A week can mean a full workweek or the number of days an individual employee typically works each week. If an employee only works three days a week, for example, you could give them three days of paid time off.

Train Your Employees

A lack of training is one of the top reasons people leave a job within their first year of employment. It may seem simple, but small business owners often overlook the need to effectively train new employees to do their jobs during the onboarding process. This can lead to job stress, poor performance, and a lack of loyalty. To prevent these negative consequences, you can:

Hire a Trainer. With a trainer as part of your staff, your employees have full access to hands-on training specifically developed for your business. This also will enable your employees to continue training, as needed, after they complete their initial training session.

Revamp Your Training. Give your employees space to express their need for more training without worrying it'll reflect badly on their job performance. Scheduling regular training updates with your team members will not only help them refresh their skills, but also reconnect with their roles.

Start From Scratch Every Time. Start every new hire's training from the beginning - for both newbies and experienced baristas. This approach will help fill any holes in their knowledge and ensure they understand how you want tasks done at your cafe.

Cross-Train Employees on Multiple Roles. Your employees should know how to complete all necessary tasks rather than having to wait for someone else to complete them. Cross-training helps employees take responsibility for their jobs and keeps your cafe running smoothly.

Treat Employees Well

How you treat your employees defines their experience in your work environment. Paying attention to employees' experience in your cafe - and actively working to make it positive - can boost your retention rates. Consider adopting these best practices to accomplish that:

Treat Employees With Respect. Your employees are valuable assets for your business - and you should treat them accordingly. Being kind and gracious to your staff members can go a long way toward ensuring they'll turn into long-term employees.

Promote Open, Ongoing Communication. Touch base with your employees regularly about their job performance, individual concerns, and any changes occurring within your business. Setting up quarterly or monthly check-in meetings with each of your employees gives them an opportunity to communicate with you and vice versa.

Create Work Schedules That Avoid Burnout. Keep an eye on your employees' schedules to ensure you don't overwork anyone. Try to give each employee a full weekend - at least two days off in a row - and avoid scheduling someone for an opening shift after they work a closing shift.

Recommended: Check out these Tips for Managing a Coffee Shop

Invest in Your Equipment

Equipment that doesn't work properly is a common source of on-the-job frustration. If your espresso machine or coffee grinder constantly has issues, for example, your employees may have to scramble to complete basic tasks. That type of situation may make them less likely to stick around. To avoid this, remember to:

Schedule Regular Maintenance. Coffee equipment requires routine maintenance in order to work properly. Proactively scheduling regular maintenance checks for your equipment will make each piece last longer and keep your employees happy.

Hire Professionals to Maintain Your Equipment. Espresso equipment is complex and requires a specific skill set to maintain. While hiring a professional will cost more than completing maintenance tasks yourself, it's important to make repairs correctly or your equipment could stay offline for longer and cause you to lose business.

Fix Issues Promptly. Temporary fixes are necessary as you wait for a repair, but they shouldn't be a long-term solution. Frustration can quickly develop when employees must work around a temporary fix rather than using fully functioning equipment.

Choose the Best POS System. A POS system that can track your inventory, produce sales reports, and offer loyalty programs goes a long way in making the life your employees comfortable.

If It's Too Late ... Conduct an Exit Interview

If you want to understand an employee's reason for leaving, simply ask them. Conducting an exit interview gives your departing employee the chance to communicate their reason(s). It also will give you an opportunity to learn so you can make adjustments that will prevent additional departures. If you face a high turnover rate despite taking steps to increase employee retention, this is the best way to learn what you can do differently to improve your work environment.

Conclusion

Taking steps to reduce your turnover rate will, ultimately, lead to a more positive workplace for you and your employees. It also can save you money along the way.

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How to Lower the Turnover Rate in Your Coffee Shop

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Lowering your turnover rate will promote a positive work environment in your coffee shop and save you money. Read on to learn why employees leave, how to determine your current turnover rate, and what to do to retain your staff for the long term.