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How to Lessen The Cost of Training New Employees

By Edited Jun 6, 2016 0 0

It's Harder to Find and Keep Good Employees

Will it affect you too?

Small businesses abound these days, some succeeding, others not so much.  Employees can contribute hugely to both success and failure.   For many businesses, especially in some sectors, it is often difficult to find and keep good employees.
In many smaller businesses the employees are often entry level pay positions.  That means generally, minimum wage or close to it.  Unfortunately that means more turnover too.  That is for good and bad reasons I think.  
On the good side, often young people start in those positions.  They may be looking for part time hours while going to school or for some income until they get a job in their field.  They move on to better positions as they able. And you want them to go on to succeed in their chosen careers and fields. 
On the bad side, sometimes minimum wage employees aren’t invested in their position and don’t treat it responsibly.  That can mean anything including being rude to customers or not showing up for their shift.
Turnover becomes overwhelming at times, one of the major reasons many sell their small businesses.  They get burned out training new employees.  When I owned a small business that was certainly true.  Today it is even harder to find—and keep--employees. 

The Cost of New Employees

Startling numbers make retention urgent

Are you aware of what it costs each time you hire a new employee?  When you are, you can see why it is worthwhile to keep the ones you have.  
The cost is estimated between $5,000 and $9000 for each minimum wage employee.  More highly trained can be in 10's of  $1000. Estimates are well over thirty percent of an annual salary. 
Think of it; the expense of a person to train,  printing and  advertising costs, instructional costs in cases where an employee is trained offsite.  Don’t forget that less work gets done by trainer and the new employee at first. Then there is the time you may be short handed while find someone new.  Plus there is wear and tear on the trainer.  All of that may easily contribute to lost business if clients feel they aren’t getting good customer service.  That may result in higher costs and lower gross income. 
Even if you can accomplish the training at half the $5,000 cost at $2500, that is profit lost that you cannot use on yourself, your business OR your employees.  Think of the increase in profits you could show.  We had some years when we had to replace over 10 employees for a variety of reasons.  The costs can be huge when you consider the number you are talking about.  Think of it in terms of a small business that may net $100,000.  It could easily eat up twenty-five percent of that profit.
With less turnover, besides additional profit, add the peace of mind and confidence you  have when your well trained staff is working together, getting the job done smoothly.  Everyone is more likely to be happy which will no doubt make your customers happier as well!  A definite win/win situation.  
When you think about that, it well might be worth paying the established employees more.  It is well worth using some of that savings are pay increases.   Remember to keep their pay moving upward too.

Be a Great Boss to have Great Employees

How to Become a Great Boss: The Rules for Getting and Keeping the Best Employees
Amazon Price: Buy Now
(price as of Jun 6, 2016)
I'd suggest any employer check out this book. If you want good employees it helps to be a good boss to them. Surprisingly, that alone sometimes is enough to retain a good worker. Do your part!

Which Came First - Bad Employee or Bad Conditions?

Take stock honestly and thoroughly

Do your customers let you know what they think of your employees and your product?
There are survey services out there, but you can easily print some little postcards up with your address on them, and put them anywhere your customer will find them.  Mail them, post on your website, at a counter or a table.  Ask the questions you want answered, include a comments section, and make them postage paid.  You will get some back, especially on really good employees and unfortunately on really bad employees. 
 If you have unhappy employees, it may be you made the wrong hire. Certainly a person may not be cut out for the position. But be sure to consider how you rate as an employer as one step to a solution.  I hear stories so often of bosses who are outright mean and rude to their staff.  How is that conducive to retention or improved customer service?  
If you have a lot of turnover it may be due to circumstances you cannot control, but it’s important to  look at what you can control.  

Learn How to Keep Your Employees Here

Carrots and Sticks Don't Work: Build a Culture of Employee Engagement with the Principles of RESPECT
Amazon Price: Buy Now
(price as of Jun 6, 2016)
A popular book written by a behavioral psychologist, with plenty of details on how to build your employees into an engaged team. Good for small business or major corporations alike. Highly recommended!


Steps to achieve it

Training Tonight
What do you do to keep your employees?  First, create an environment for them to flourish.  No matter what pay level or what size your business is, that can and should be done.  As a small business owner it wasn’t possible to provide many benefits for employees.   But whatever the size of your business, do what you can.  
Perhaps the easiest way to start is to apply the Golden Rule.  It’s as important in the workplace as  it is out of it.  To paraphrase, “Treat others as you would be treated.”  It sounds simple and obvious, doesn't it?  But do you actually put it in to practice?  In other words, treat your staff with respect, kindness and appreciation.  Make them feel good about what they do.
Next,  train well in the beginning and offer ongoing training.  Ask your employees.  They will usually know where  more training is needed. Find out what they would like to learn,  how you can help them improve. Give them opportunities to learn new things and grow. It makes it more stimulating for each of them.  Encourage whatever education they are pursuing, perhaps offering partial  reimbursement for the cost or even a cash reward for a completed class. 
Be flexible with their scheduling whenever possible.  If you are willing to work with the hours they prefer, requests for days off, it makes it easier for them.  That can be a big deal for some employees, one that will make them happy to stay with you.  It isn’t always easy, but it’s always appreciated.  
Provide ways for them to make additional money, such as  training other employees, working on a special project, working a job or industry fair.
While It grows harder to make a profit in many small businesses,  a simple thing like a personal day with pay, a little vacation time that builds up, can make an employee more grateful for the job and far more likely to stay.  You can require a specific amount of hours to be worked before they are eligible, but it's a treat and a relief for an employee to be able to take time off occasionally, knowing they will still be paid.  A paid birthday off is another sweet bonus when an employee has been with you awhile.

Gift Cards are Always Welcome

Local stores are good choices too

Gift Cards
Credit: Copyright Merrci


In as many ways as possible

Finally,  acknowledge their efforts.  It's so important to do regular reviews.  It's equally important to give raises as they improve and do more.
Give them recognition when they do something well or exceed expectations.  They've earned it!  There are  many other ways to accomplish this too, and many with little or no cost.  Here are just a few suggestions:
  • Awards—employee of the month--take a photo, perhaps have a special parking space
  • Award certificate—put it in writing so they can have it to keep
  • Social Media recognition-- acknowledge employees on FB, etc. there with a photo
  • Dinner for two  
  • Pay increase or promotion
  • Movie tickets for two
  • Little surprises, like pizza, Starbucks or Amazon gift card.
  •  Discount on products you sell
  • Free meal or discount on food if you are a restaurant
  • Bonus for reaching a company goal you set
  • Christmas Bonus  
If you consider what you can save when you retain the good employees you have, you may well find it easier to set aside $100 or $200 each month to spend on some of the suggestions above.  You may even be able to trade products with another business that will keep costs even lower.  
The thing is, they are relatively small things to do, but can be so uplifting and appreciated.  Provide a pleasant place to be.  Have fun.  Listen to your employees.  Think of the time and money it might save. 


Reward Your Employees

1501 Ways to Reward Employees
Amazon Price: Buy Now
(price as of Jun 6, 2016)
The latest book on rewarding employees by Bob Nelson. His previous book was a bestseller. Updated to include the latest, such as virtual assistants, this edition should be in every employer's library.


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