Your employees are the backbone of your business, and only they can put you on the growth path. Without them, you cannot attain to achieve your mission and vision for your business. It is, therefore, crucial that you keep a sharp eye not only on the rate of labour turnover in your business, but also take steps to ensure that it is at a minimum.
SupportBiz lists five reasons for you, as a small-scale entrepreneur, to look beyond labour turnover.
1. Productivity issues
A low labour turnover rate does not indicate that all your current employees are completely satisfied and happy with their jobs. It might also indicate that they are willing to leave you, but are not able to due to certain reasons, like no similar firms in the locality or not getting another suitable job. Such employees will be low on productivity and morale.
You want all your employees to be happy and content with their work, for them to give their best to your business. Hence, it is essential that you also examine this aspect while you are studying your labour turnover rate.
2. Future referrals
When you are considering hiring new employees for your business, the first thing you usually do is ask your current employees for referrals from among their friends, acquaintances and family. However, your current employees will be ready to refer potential candidates to you only if they are happy with you and consider you a good employer.
No employee wants a friend or acquaintance to quit his/her current job to come and work with a firm that does not value its existing staff. For this reason, too, it is crucial that you keep track of how satisfied and happy your present staff is with their jobs.
3. Economic reasons
The economic downturn of the recent times has led to every business wanting only the best of employees for itself. The best of talent gets employed easily, at high salaries, while the rest are unemployed or underemployed. However, as a small firm running on a limited budget, you might not be able to afford the high salaries that need to be paid to someone with a high level of talent.
This is another reason to take care of your present staff, and keep them content and happy with their jobs.
4. Lack of suitable talent
In spite of the mushrooming of business education institutes, there is a real dearth of people who are talented and capable enough to don the multiple hats that working in a small firm necessitates them to do. Talent shortages do exist.
If you do not pay attention to the happiness quotient of your existing employees, you might be put into the difficult situation of being unable to find other, suitable staff members. Hence, it is always a good idea to keep track of the levels of happiness and satisfaction of your employees and ensure that they are high.
5. Training and development time
Even if you are able to find suitable new employees for your small business, will you be able to make the time to appropriately train and develop them?
New employees do not immediately start contributing to business, unless they are very exceptional. They need time to understand your business and their role in it, and how best they can contribute to you. This might be difficult for a small business, considering that they run on a day-to-day basis in order to ensure regular cash flow. Do think over whether your business will be able to take the strain of reduced cash flow during the training and development period of new employees. Moreover, will you be able to dedicate enough time and resources to train them?