Posted on: Wednesday, July 21, 2004

Firms can take steps to keep best employees around

By Caroline Lynch
Louisville (Ky.) Courier-Journal

Clouds of employee turnover are brewing on the horizon, retention experts warn, but small-business owners can take precautions.

Beverly Kaye, co-author of "Love 'em or Lose 'em, Getting Good People to Stay," said all of the elements are coming together to create the "perfect storm."

"With a healthier economy, e.g., more jobs and more customers, coupled with unhappy employees who have been biding their time while the economy is tight, and fewer people in the job market — job hopping is going to increase," she said.

But small companies can improve their chances of keeping good employees if they play to their strengths, take the time to understand what their people want and get creative.

Executives at Service Net, a warranty-services company in Jeffersonville, Ind., surveyed employees about their work environment as it planned a $5 million renovation of its building.

"People said, 'Get me out of this box,' " referring to their cubicles, said Michael Neumann, whose title — manager of culture training and enrichment — reveals the importance his company places on getting the most out of employees.

Today, Neumann's office looks over a room of about 75 call-center employees in zigzag workspaces.

The employees get natural light, too, but in ways that don't create glare on their computer screens.

The perks go on. A basketball hoop stands outside the door to the executive offices, and a "wall of fun" reveals another benefits boost. Service Net's employees get $100 of fun money a year. The caveat is that they must catch the fun on camera.

Neumann attributes some of Service Net's growth — to about 325 employees and more than $57 million in revenues last year from four employees and $200,000 in revenues in its first year — to its ability to hire and retain good people. Many call centers have 100 percent annual turnover, while Service Net's rate is around 40 percent, he said.

In the most recent issue of My Business, the small-business magazine from the National Federation of Independent Business, Service Net was named the "best employer."

Javier Lozano, Pacific West regional director for the Society of Human Resource Management, said Neumann's approach is on target.

"You have to know what drives individuals," he said. "Ask the questions."

The asking must be followed by doing, he said.

Kim Baird, managing director of HR Search Firm in Denver, said it's important not only to address the high-performance employees but also the problem people. Ignoring underperformers can drive away good employees.

"If they were carrying the whole weight and nothing was done about the people who weren't, they think 'Why was I working so hard?' " she said.

Kaye, the author, said having good managers is critical.

"People don't leave companies," she said. "They do leave bad managers."