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Highly unlikely.  They’re probably leaving on their own.   As you have realized, though, this can be a big problem. Replacing an employee who earns $8 an hour may cost as much as $3,500 when incidental costs are calculated.  It may cost much more for a start-up that depends on the unique intellectual and technical talents of a particular employee.  The loss can be crippling.

The law spends a lot of ink on protecting employers from financial risk when an employment relationship ends.  Let’s turn this question on its head and give some thought to protecting employers from financial loss by improving or preserving an employment relationship.  Why is that employee sleepwalking through the workday?  Why did he or she quit?  It may not be about the money.  It may be about disengagement.

What is Employee Engagement?

Employee engagement is a business management concept that attempts to measure employees’ enthusiasm for their task and employer.  The goal is to improve productivity and minimize adverse consequences such as turnover, absenteeism, indifferent customer service and accidents.  Many studies arrive at similar conclusions about what keeps an employee engaged.

121356474People are profoundly social, so it should be no surprise that these studies consistently report that engagement depends on a good relationship with the manager and co-workers (perhaps why The Office is so cringe-worthy).  Next up is a sense of power to do the job in terms of resources and decision-making input.  Last is recognition (preferably immediate) for a job well-done.   Your star employees may actually be the hardest to keep because they expect a lot of themselves and everyone else.  Divas run hot and can become alienated very quickly when frustrated or disappointed.

Four Things a Small Employer Can Do to Improve Employee Engagement

Perhaps it is not possible to compete with the monster rival on compensation.  You may be able to hold your ground with intrinsic factors, however.  Here are four strategies to level the playing field.

  • Communicate frequently about organizational goals and the role of measurable individual performance in achieving those goals.  “To make our quarterly goal, each salesperson should focus on $x in sales per workday.”
  • Conduct “stay interviews,” rather than just exit interviews.  “Good job with the Fillintheblank campaign, Miranda.  How do you see this developing?  Have you had some thoughts about where you’d like to see the company go next?”
  • Consider paying bonuses immediately after a remarkable achievement.  A bonus of company stock allows the employee to own the enterprise’s success in a real way.
  • Organize your workforce in teams and, where possible, allow team members input into decisions that affect how they work.

More Traditional Legal Tools

This may be an opportunity to review your approach to employee benefits.  Some options like wellness plans or flexible scheduling may be demographically appropriate for your employees and relatively inexpensive to implement.   A simple survey may be all you need to determine interest in some of these alternatives.

Some other legal tools have a decidedly different flavor but may also have a place in your overall strategy.  A well-drafted severance agreement may actually give your talent some assurance that you intend to keep them.  Appropriately limited non-compete agreements may keep your clients from walking away with an unhappy employee.   A nondisclosure agreement may protect trade secrets.  Courts typically look at these restrictive agreements with disfavor, and they may not be the best way to work with talent, but consider them part of your toolbox.  Keeping valuable employees and maximizing their engagement should be as much a part of your business strategy as product development or financial forecasting.  Even on a lean budget there are several steps you can take to protect your investment in them.

Legally Sound | Smart Business Episode 10


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Legally Sound | Smart Business covers the top business stories with a legal twist. Hosted by attorneys Nasir N. Pasha and Matt Staub of Pasha Law, Legally Sound | Smart Business is a podcast geared towards small business owners.

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