TL;DR: Don’t be a jerk or you will pay for it big time. Value and respect your employees and you’ll profit.

The Problem

Employees are expensive to gain. But they are even more expensive to lose. Yet employees leave companies every day because these companies don’t have an environment where people want to stay. And so the employee leaves, and your hard earned investment is gone. So what is the real cost of turnover? Well a foolish manager would only think of the cost to get a new employee into that chair. “After all, it’s just more paperwork and some interviews” Right? Wrong! There are a whole host of hidden costs that come when an employee leaves. The onboarding costs are, advertizing, acquisition, signing bonuses, overworked HR, and training. Other costs of turnover are decreased productivity, the time it takes for the employee to become proficent, and damaged morale. The damaged morale is the most deadly, because others often follow when one person leaves, because if one employee is dissatisfied you can be sure there are others who are thinking of jumping ship.

Reducing employee turnover

The Solution

So how do we fix this? Well the idea of fixing turnover is easy, but it’s the implementation that is difficult. To sum up, managers should stop acting like jerks and set up an environment where people will want to stay. I say management because top-down culture is much more potent than bottom up culture. This is especially important for top level managers like the CEOs and COOs, since they have the highest amount of influence.

So what can you do to reduce turnover? You need to create an environment where people want to spend their working hours, and the key things you should do are: 1) Respect them, 2) Listen to them, and 3) Trust them.

Respect Them

First off, know their name (first and last). By knowing their name you show that you respect and value them. This in turn helps them to feel valued, which helps fulfill their need to be esteemed.

Another reason to respect them is that they likely know something you don’t. Yes you might be an all-powerful leader in your company, and yes that person who just walked into your office is a custodian, but have you ever considered that they know something that you don’t? Have you considered that they are more skilled and adept at something than you? Perhaps they know the most efficient way to clean an office. Or perhaps they are better at organizing supplies than you. Or perhaps at home they make the best tamales, or meat pies, or bread etc, and they put your cooking to shame. Granted you might have better overall skills than they do, but always remember that they have at least one skill where they are better than you. And when you start looking people this way you’ll see them in a new light. You’ll start to see them as capable individuals with a grand potential. They just aren’t there yet. So respect them, treat them well, and recognize that they know something that you do not.

Listen To Them

You can also encourage your employees to stay by listening to them. It’s hard to listen. You’ve got to put your ego aside, and act like the other person has something more important to say. Yet we often don’t listen to our employees, and they feel neglected, disrespected, and ignored.

For instance, the employees on the front lines are usually the first to hear a customer’s problem. They see the pain this problem is causing. They often report the issue to management, and they sometimes will even recommend a solution. But management often does nothing. Bug fixes go unresolved for months, and old processes and procedures remain unchanged. As a result, BOTH the customer and the employee are ignored, and both will feel disrespected. And if the disrespect runs deep enough then the customer will take their business elsewhere, and the employee will leave–taking your hard earned investment with them. So, listen to what your employees have to say. They will tell you the problems your customers are REALLY having. And by fixing those problems you create more value for your customer which leads to increased customer satisfaction which leads to more revenue. It’s a happy cycle, but it only works if you start to listen.

Trust Them

The last and best act you can do is to trust your employees. We have too many managers who want to control each and every step of the process. Instead, be a leader. Show by example what you want your employees to do, and then get out of the way and let them do it. Too often we get in the way of progress for the sake of control. If your employees sense that you trust them most of them will rise up to that level, and will act trustworthy. This stems from labeling theory. True some might take advantage of this (at least for a time), but the majority will be honest. And those honest people will guide the company culture which leads to increased integrity and productivity. All because you trust them.

And so what if someone breaks your trust? Either give them a second chance or if you have to just fire them. At this point your company culture will be such that people will want to work for you, and you’ll start attracting top talent. And if you have an employee who doesn’t want to work and who isn’t productive, well they won’t want to work there, and will feel out of place. In this case, firing them will be a natural and easy choice.

Finishing Up

You employees will serve you, but you need to respect them. They aren’t livestock. They aren’t your property. They are an investment and they need to be treated as such.

So respect them, and listen to them, and trust them, then they will become loyal to you. They will want to work for you. And they will follow you, because you’ll be a leader. And in turn, your investment will pay off. Your revenue will increase, your employees will stay with you longer, and everyone will profit.

Or you can keep being a jerk, and pay for it over, and over again.

You choose.


Thank you for reading this. When I’m not writing articles I help people increase their sales by making small changes on their website that make a huge difference. Don’t believe me? Reach out to me, and I’ll review your site and give you actionable steps on how you can increase your revenue. And if your site is already perfect, then drop me a line and we can talk shop. It’s always good to talk to another techie.