Home Leadership Turn Archives Me RampUp Solutions Option Sanity

  • Categories

  • Archives
Archive for the 'Retention' Category

Ducks in a Row: Proof That Employee Turnover Hurts Customer Retention

Tuesday, March 24th, 2015


Back in October Twitter and IBM announced a new service to give enterprise a way to mine its 15 billion daily tweets.

Of the research done since the, one result surprised them.

The more a customer shops at a particular store or eats at a particular restaurant, the more likely they are to stop shopping there when employees leave. It stands to reason that you would get to know the people at a place you patronize often, but IBM found that really loyal customers get so attached to employees that they complain on Twitter about having to “start over” if a favorite employee leaves. If they don’t feel like employees know them, this can really impact revenue because the loyal customers are the ones who spend the most money.

Do you find that surprising? I don’t, having done the same thing myself. (I’ve also switched brands when a favorite was acquired by a company I didn’t trust.)

Cost of customer acquisition is the most critical, prime metric when valuing any business, from startup through Fortune 50.

For the last few decades the prime focus has been on investors, while customers came in a long second; IBM’s findings move customers much closer to investors.

Why employee turnover results in customer defections isn’t the least surprising.

It’s a well accepted dictum that people don’t leave companies, they leave managers — or leave because of management turnover, so customers leaving for a similar reason makes sense.

However, employees are still a long third behind investors and customers.

When I started writing this blog back in 2006 I cited research by Frederick Reichheld that proved a 5% improvement in employee retention translated to a 25%-100% gain in earnings.

You would think that a 25% earnings increase, let alone higher, would be enough to get the attention of even the greediest Wall Street types, but obviously not, since low employee turnover is still cause for amazement.

Perhaps the new Twitter/IBM findings will help drive the needed change.

Image credit: BetterWorks Breakroom

Your comments-priceless

Don’t miss a post! Subscribe via RSS or EMAIL

  • What did you think of this article?
Show Results

Ducks In A Row: Affordable Reward

Tuesday, January 27th, 2015


Looking for a perk or bonus for your people that won’t break the bank?

Consider paying for them to take a course that interests them at sites such as Pluralsight or Universal Class, whether career oriented or just of personal interest.

Because it’s a perk/bonus, it’s similar to providing movie tickets, i.e., while you choose the theater you don’t pick the movie.

It doesn’t matter if they want to learn a new programming language or how to make wine.

The point is it’s a reward, beyond normal compensation, for their hard work.

Yes, the classes provide them with new skills they may choose to apply elsewhere, but if they don’t have the opportunity to learn new skills, face new challenges or get bored they will leave anyway.

Providing learning opportunities won’t hasten the process; what it will do is give them reason to sing your praises as a great boss/company to work for in the event they do leave.

All of which will positively impact your street rep and improve/enhance your recruiting efforts.

Image credit: Eric Harrison

Your comments-priceless

Don’t miss a post! Subscribe via RSS or EMAIL

  • What did you think of this article?
Show Results

Bottom Line Rocket Science

Wednesday, November 19th, 2014


What do SAS; Warby Parker and Toms Shoes; FullContact; Petagonia have in common?

Flexibility, AKA work/life balance.

I’ve written about all of them and for the same reason—they get it.

They get that people are their most valuable asset; they get that replacing them costs far more than the cost of an ad; they get that top talent is looking for more than a fat paycheck.

Lisa Horn, who tracks workplace policies for the Society for Human Resource Management, which represents more than 200,000 members from the HR departments of companies around the world, said many businesses, which, since the Great Recession, have forced employees do more with less, are facing new realities: Millennials who value time for both work and life, and fierce competition for the most highly skilled employees who can easily jump ship for something better. “Already 87 percent of employees say flexibility and balance is important or very important in their next job. So it would behoove companies to adopt these strategies for competitive advantage.”

Companies that get it thrive and not just in the short term.

SAS has been doing it successfully since 1976; so much so that Google’s very own Larry Page and Sergy Brin visited to learn SAS’ approach.

Family-owned Patagonia has doubled in size and tripled in profits since 2008; it has 2,000 employees around the globe and minimal turnover.

A comment from TSD (10/24/2014 5:38) on the Petagonia article sums it up nicely.

I never have figured out why treating your workers well is such a hard concept for so many businesses. I work harder and faster and better when I’m happy and not terrified. Granted, I’ve never owned a business, but it seems pretty simple. Miserable workers will not be productive.

It’s not rocket science—or maybe it is.

Flickr image credit: Steve Jurvetson

Your comments-priceless

Don’t miss a post! Subscribe via RSS or EMAIL

  • What did you think of this article?
Show Results

Dan Amos’ Simple Sync Solution

Wednesday, November 12th, 2014

Dan Amos-Aflac

I said yesterday I’d provide a simple way to get back in sync with your people.

It’s not rocket science and certainly not new.

In fact, I’ve been telling managers for decades that if they want to know what someone thinks or wants to ask, instead of assuming or “figuring it out.”

They rarely listen, so I thought that if it came from Dan Amos, chairman and chief executive of Aflac, the giant insurance company it would carry more weight.

Aflac chief Amos admits his solution sounds obvious: If you want to know what would keep someone from quitting, ask. “It sounds like common sense, but not many companies really do it.”

I’ve also been saying that money is around five on most people’s list; making a difference, recognition, challenge and opportunities to learn and grow come first.

Employers often assume, Amos says, that everyone will just want more money. But most people’s wish lists are more complicated — and more realistic — than that. Amos started polling Aflac’s employees when he became CEO in 1990. The top requests: More recognition for their work and day care for their kids.

Many companies survey their people.

The difference is that Amos acts on the results of the survey—both requests were implemented — not just in the home office, but across the country (read the article).

Amos says that “the survey rules” and the proof is found in ease of recruiting and turnover numbers.

That willingness to listen has helped Aflac — the only insurance company to show up in Fortune’s Best Companies ranking for 13 years running — to successfully recruit talented women from all over the U.S. and from as far away as India.

It also, apparently, builds loyalty: Aflac’s annual employee turnover is pretty close to zero.

Flickr image credit: Aflac

Your comments-priceless

Don’t miss a post! Subscribe via RSS or EMAIL

  • What did you think of this article?
Show Results

Ducks in a Row: Are You in Touch with Your People?

Tuesday, November 11th, 2014

https://www.flickr.com/photos/fabioluiz/5419362401Ask most managers and they’ll tell you that they understand their team’s goals and concerns. They see themselves as in sync with their people.

But are they?

Based on a study about stress the difference in perception of cause between workers and managers is more a chasm than a rift.

But what was particularly striking about the findings was the disconnect between what employees and managers perceived: Inadequate staffing was cited by 53% of workers as the major reason for stress, while only 15% of senior managers thought this was so. A third of managers said that access to technology outside of working hours was a cause of stress, but workers disagreed, with only 8% citing it.

Disconnects between managers and workers are never good, but when the subject is something l like stress it can have a major impact on the bottom line.

Stress lowers productivity, hurts creativity and innovation, increase absenteeism, leads to health problems, thus raising health care costs

In short, stress causes and escalates disengagement.

Of those employees claiming high stress levels, 57% said they were disengaged. In contrast, just 10% with low stress levels said they were disengaged.

Obviously, being out of sync with your people costly to both your company and to you, personally.

Join me tomorrow for a look at getting back in sync and other useful information.

Flickr image credit: Fabio Luiz

Your comments-priceless

Don’t miss a post! Subscribe via RSS or EMAIL

  • What did you think of this article?
Show Results

Kip Tindell and The Container Store

Wednesday, October 29th, 2014


The hourly base wage for fast-food workers in Denmark is $20USD, yet McDonald’s, Burger King, etc., are still profitable.

Try to sell a minimum wage increase to just $15 and you’ll be told that it would destroy jobs and close businesses.

But, as the song goes, it ain’t necessarily so.

Despite starting out with just a $35,000 investment in 1978, The Container Store founder and CEO Kip Tindell has grown his business to one that has 67 US locations and rings up annual sales of nearly $800 million.

Equally impressive is the fact that he’s done all that while paying his retail employees nearly twice the industry average.

So what does Tindell know that other bosses of retail businesses don’t? You get what you pay for…

  • “The 1=3 rule,” i.e., one great employee is as productive as three OK employees, so he gets three times the productivity of an average worker at only two times the cost.
  • Turnover is lower substantially reducing hiring and training costs.
  • Annual raises up to 8% of their salaries, based on performance, but
  • encourages managers to evaluate employees based on their value to the company.

The result is the average Container Store retail salesperson makes nearly $50,000; about double the national average for retail.

When it comes to wages, Kip Tindell is the Twenty-first Century’s Henry Ford.

Ford astonished the world in 1914 by offering a $5 per day wage ($110 today), which more than doubled the rate of most of his workers. (…) The move proved extremely profitable…

The minimum wage war should become a lot more interesting when Tindell takes over as chair of the National Retail Federation.

It’s a lot harder to argue with success.

Flickr image credit: Tomer Gabel

Your comments-priceless

Don’t miss a post! Subscribe via RSS or EMAIL

  • What did you think of this article?
Show Results

Ducks in a Row: the Reality of Culture

Tuesday, October 14th, 2014


Washing dishes for Jeff was grueling, greasy work. But then again, making a pizza, or driving a truck, or baking a cake, or any of countless other jobs are not always enjoyable in themselves, either. Out of all the lessons I learned from that guy in the Pizza Hut tie, maybe the biggest is that any job can be the best job if you have the right boss. Danial Adkison

People work for people, not companies.

People quit people, not companies.

They accept positions because of the culture and leave when it changes.

Bosses interpret company culture; they improve or pervert it; they add/subtract/polish/tarnish it.

What bosses don’t do is pass it on intact and untouched.

Flickr image credit: Susanne Nilsson

Your comments-priceless

Don’t miss a post! Subscribe via RSS or EMAIL

  • What did you think of this article?
Show Results

If the Shoe Fits: Hiring Responsibility

Friday, August 8th, 2014

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

5726760809_bf0bf0f558_mWhose responsibility or fault, if you’re feeling judgmental, is it if a hire goes south?

No matter the circumstances, that dubious honor lies with the hiring manager.

In the decades I’ve worked with hiring managers I’ve heard every conceivable (and inconceivable) reason, but none shifted the de facto responsibility (blame, if you prefer).

Most of the time managers’ claim some variation of ‘the candidate lied…’

Of course, that’s what reference checks are for.

Often it’s the manager who doesn’t

  • sufficiently think through the job;
  • consider the current team’s competencies;
  • accurately share the culture; or
  • was even consciously aware of the culture;
  • consider the candidate’s career interests;
  • etc., etc.

The main thing to remember is what good hiring actually means:

Hiring the right person into the right position at the right time and for the right reasons.

Change any “right” in this sentence to “wrong” and you’ll end up with a bad hire, but a bad hire does not mean a bad person.

Bad hires have four basic ingredients—

all of which are a function of the hiring manager’s MAP and can be overcome.

Founders, like many managers in larger companies, frequently claim they are too busy to take time to lay the groundwork for solid hires and then wonder why they make hiring blunders.

Poor hiring leads to high turnover.

High turnover shrinks your candidate pool because it wrecks your street rep and street reps are forever—good, bad or indifferent—nothing fades away in this digital age.

Image credit: HikingArtist

Your comments-priceless

Don’t miss a post! Subscribe via RSS or EMAIL

  • What did you think of this article?
Show Results

Saying Good-by to a Well-Loved Boss

Wednesday, August 6th, 2014

Do you like your boss?

Or do you love your boss?

Obviously, the global staff at online luxury fashion retailer Net-APorter loves theirs.

The company was founded in 2000 and MARK Sebba joined in 2003—not the best of times for the dot com world.

During Sebba’s 11 years as CEO Net-APorter grew to €550m sales last year, 2,500 people and a valuation around €2.5bn

When he stepped down from that role the end of July his people found an amazing way to show their feelings.

The comments at YouTube are pretty cynical; saying that he must have known about the tribute, etc., but that’s not really the point.

Watch the faces of the staff and you’ll see emotion that can’t be faked.

Whether he knew or not, his staff’s feelings are very real.

YouTube credit: Diagonal View

Your comments-priceless

Don’t miss a post! Subscribe via RSS or EMAIL

  • What did you think of this article?
Show Results

Investing—What Pays Off?

Monday, August 4th, 2014


“It’s not about the dollars you invest. It’s about the people you invest in.”

I don’t remember where I read that, but it’s certainly true.

Some bosses invest in their companies—they buy new hardware, upgrade development software, customer service and other IT systems, improve the physical environment, etc., etc.

They spend to improve their company’s bottom line.

They don’t spend much on training.

They believe the money spent building and growing people provides marginal return, while increasing turnover.

Great bosses invest in their people—they encourage learning new skills, cross-train, provide access to educational opportunities, etc., etc.

In return they have a highly creative, fully engaged, hyper-productive workforce.

They know people may leave if there are no internal growth opportunities, but great bosses cheer them on.

They know that people leave for many reasons, but when the reason is positive then the buzz is positive.

And positive buzz enhances both the boss’ and the company’s street rep.

Flickr image credit: opensource.com

Your comments-priceless

Don’t miss a post! Subscribe via RSS or EMAIL

  • What did you think of this article?
Show Results

RSS2 Subscribe to
MAPping Company Success

Enter your Email
Powered by FeedBlitz

About Miki View Miki Saxon's profile on LinkedIn

About KG View KG Charles-Harris' profile on LinkedIn

About Ajo View Ajo Fod's profile on LinkedIn

Clarify your exec summary, website, marketing collateral, etc.

Have a quick question or just want to chat? Feel free to write or call me at 360.335.8054

Download useful assistance now.

Give your mind a rest. Here are 4 quick ways to get rid of kinks, break a logjam or juice your creativity!

$10 really does make a difference and you'll never miss it.
Always donate what you can whenever you can.

The following accept cash and in-kind donations:

Web site development: NTR Lab
Creative Commons License
This work is licensed under a Creative Commons Attribution-NoDerivs 2.5 License.