Despite the economy gradually recovering after a turbulent economic downturn, many Australian workers are still experiencing the effects of the GFC at a personal level. As a result, this has decreased small enterprises’ ability to retain their best people. As the last quarter of 2012 closes, more business owners are on the lookout for ways to improve their staff retention and maximise their capacity for the business to meet its targets in 2013.
Finding and keeping the best employees is vital to the health and success of your business. Adequate salary and compensation are just one factor in ensuring you keep your best people. Other factors that motivate staff are job satisfaction, a good working relationship with co-workers, the opportunity for personal growth and career advancement. The common denominator with these factors is clearly visible – they have no monetary value.
The influence of salary on an employee’s job satisfaction differs significantly from a person in an entry level position to the people in more senior positions. Often an increase in salary creates more value to the people who have just started working, as they are often on low salaries that just meet their basic needs. They are the ones who would readily jump from one job to another for a 10% salary increase. Industries who offer very low salaries at an entry level are likely to have low staff retention rates in these positions.
Placing more value on your employee’s job satisfaction could therefore result in savings that outweigh the cost of higher salaries. Low salaries may save you money in the short term, but in the long term they equate to higher hidden costs such as recruitment, training, increased supervision and poor serviceability. If left unresolved, this could seriously impact on your business. Employers who understand the benefits of appropriate compensation, both monetary and non-monetary (e.g. opportunities for advancement, recognition, etc.) create a culture in their workplace which nurtures their employees and keeps the best people in their company.
As business owners, how do you motivate and retain the key people in your business? Does your company provide a career path for your employees? Share your insights with us in the comments section below.