How to keep your best employees from walking out the door (Proceedings)

Finding and keeping good employees has arguably been the most difficult task facing the veterinary profession for some years. Without these employees, veterinarians will not be able to offer the high levels of medical and surgical care that they wish to, nor will they be able to provide the kind of client service that keeps clients returning to a practice and allows the business to prosper financially. These issues are not specific to just one group in a hospital; it is just as difficult to find and retain good receptionists as it is good technicians.

Why specifically is employee retention important?

     • Direct, tangible costs of attrition are high

     • Intangible productivity loss costs are high

     • Disruption to operations is bad for morale and client service

     • Emotional toll on employees still at the practice can be drainings

     • Finding new good quality employees is increasingly difficult

Why do practices have an employee retention problem? First of all, there are more jobs out there than good quality employees. Remember that the recession is a blip on the radar screen. Unemployment is high now and this may give practices a false sense of security about finding and keeping employees. But the long-range forecasts for finding good quality staff are dismal. A widespread shortage of talented employees is expected over the next 5-20 years and the time to prepare for it is now. In addition, businesses are dealing with a new generation of workers who are smart and have high expectations of the places they work. They don't have much tolerance for poor management and have the luxury of being able to leave and, at least in veterinary medicine, find another job easily.

The most critical step in retaining good employees is to know what they want. The days are gone when all that mattered to employees was having a job (any kind of a job) and getting a regular paycheck. The employee-employer relationship is now an equal one and employers must offer more than money to keep the kind of staff they need to effectively run the practice.

Unfortunately, employers frequently don't know what employees want. Kenneth Blanchard (author of The One-Minute Manager) surveyed 10,000 employees about what made them satisfied with their jobs. He also surveyed managers and supervisors as to what they thought made employees satisfied with their jobs. Interestingly enough, the answers were very different.

Employees listed the top five components of job satisfaction as being:

     • Appreciation of work done

     • Feeling of being "in on things"

     • Help with personal problems

     • Job security

     • High salary or wages

Employers thought the things that made employees satisfied were as follows:

     • High salary or wages

     • Job security

     • Promotion in the company

     • Good working conditions

     • Interesting work

The truly remarkable finding from this study is that the top three items on the employees' list were the last three items on the employers' list.

While salary is often not the most important thing to employees; the salaries and benefits offered to people in your practice must be at least consistent with the rest of the market. Great working conditions will not make up for a poor salary and benefit package. Compensation has limited value as a continual motivator of employees, but has huge power as a demotivator. When an employee gets a raise, he or she is thrilled with it for the first month, but after that accepts it as the standard pay. This is the point at which it ceases to motivate him or her to higher performance. However, if a practice does not pay a fair market wage, the employee will continually be demotivated. One study done by Watson Wyatt Worldwide in The Human Capital Edge: 21 People Management Practices Your Company Must Implement (or Avoid) to Maximize Shareholder Value, indicates that to attract the best, your pay can't be average. While you may not have to pay the most for a given job in a given market, you probably need to be in the 75% percentile.

Employees can get a certain salary at many different businesses or practices. They will stay with your practice because it fulfills other needs. Every person has different reasons for working and different needs they want fulfilled through the work environment. In addition to money, common ones include: a love of what they do, learning new skills, social interaction and serving a good cause. But the list is potentially endless because people are different and want different things.

Therefore, employers need to remember:

     • What you want is not what everyone wants

     • Don't assume you or your managers know what employees want

     • Employees have a wide variety of motivators

     • The best way to find out what employees want is to ask them

One way of looking at what it takes to retain employees is to look at what they don't like in the work environment.

HR Solutions, Inc., a Chicago-based management consulting firm specializing in employee engagement surveys, surveyed over 2.2 million employees from 2100 organizations and compiled the following list of things employees complained about in their jobs:

     • Low pay

     • Lack of internal parity in pay

     • Lack of good benefits, high cost of employee portion of benefits

     • Over-management or micromanagement

     • Lack of merit guidelines for pay increases

     • Lack of response to employee needs and concerns

     • Favoritism

     • Poor communication from management

     • Too much work

     • Dirty, poorly organized work environment

Flexible scheduling and work/life balance are also highly important to many in the current workforce.

Increasing employee retention isn't just about throwing money at employees; its about offering them a total work environment and compensation/benefit package that meets their needs.

Tips for reducing employee turnover

The first step in retaining employees is effective hiring. Interviewing and hiring employees is not an easy task. Mike Best, President and CEO of MJDesign once said about their holiday hiring program "If the person came in and filled out the application, we basically hired them unless they were followed by a policeman." While veterinarians often feel this same level of desperation when looking for employees, it isn't the way to get the ones who will truly be an asset to your practice.

Key reasons managers often don't hire the right people include:

     • You don't know the job

     • You don't know the culture

     • You don't get enough information about the applicant

     • You don't probe

     • You focus only on skills

     • You don't remember information after the interview

Once you have hired the appropriate person for the job, you must make sure they have the training necessary to succeed. Formal training programs are critical; informal on-the-job training simply won't give your employees the skills and knowledge they need to consistently do a good job and stay motivated. Other benefits of formal training include:

     • Increased efficiency

     • Improvement in client service

     • Avoidance of legal problems

     • Increased practice earnings

Training isn't just a one time activity when the employee is hired; ongoing opportunities must exist for employees to continue to expand their skills. Also give them an opportunitity to share their knowledge with others; not only does this solidify their own skill sets, it lets them feel as if they are an important part of the practice.

Clarify the expecations for receiving salary increases. Many employees often feel that the amount of money they make is out of their hands and that their pay raises don't really reflect their contributions to the practice. This is because practices often ignore internal parity in how they pay (discussed below) and use a "one-size-fits-all" raise system. For example, everyone gets a $0.50 raise or everyone gets a 3% raise.

It is critical that practices establish a "pay = performance" philosophy and communicate to employees the skills (both technical and interpersonal) that are valued by the practice and will be rewarded at raise time. This can be done through the following:

     • Clear communication of the components of the salary and the work the employee is to contribute to earn that salary during the hiring process

     • Well thought out, well written job descriptions

     • Training and support of the employee in the skills necessary to do their jobs

     • Regular meetings with the employee regarding their performance in all areas

Ultimately, raises should be determined at the time the annual performance evaluations are prepared and the best raises should go to the best performers. When raises are communicated to the employee, they should also be told what things they have done to contribute to their raise and which areas they should work harder in to get a bigger raise next time.

NOTHING de-motivates people more than seeing others who perform worse than or comparable to themselves make more! And it is very easy for this to unintentionally happen in a practice. For example, one technician got hired two years ago at $10.00 per hour. She has had two raises since then and now makes $11.50. But when the practice goes to hire a new technician this year, they realize they can't get anyone for less than $12.50 per hour. So they pay it. But the two technicians have equivalent skills and actually the first technician is currently more valuable to the practice because she has been there a couple of years, knows where things are kept, who the clients are, what the routine is, etc. Is it really fair to pay her $1.00 an hour less? And do you really think she won't find out?

In order to keep this from happening, practices need to evaluate their internal compensation parity at least once a year. One of the times this should be done is when the performance evaluations have been prepared and the raises are being determined.

And finally, provide lots of employee recognition. After the money, this is why people get up and come to work. A simple "thank you" goes a long way in making employees feel a part of the team and is easy and inexpensive to do. Recognition will be most powerful, however, if you vary the form. A letter or personal note thanking them for a job well done, gifts, gift cards, an afternoon off, the best parking space for a month—all of these will motivate employees to continue doing a good job.