Retaining great employees

There is talk on the web about retaining great employees and the way some of the articles are written about the subject you would think a lot of companies have a real struggle to get and keep great employees.

Not sure what makes the employees “great” employees other than the fact that if they are the ones leaving the company they obviously have options elsewhere.

So what would I do if I had a company with employees and I wanted to retain them without going over the top and paying them huge salaries obviously …

Allow home working

If your company is in a position to do this, allow the employees to work from home as and when they choose to.

Less hours in work day

Expect 5 hours “in the zone” work from each employee each day but pay them for 7.5 / 8 hours.

Allow the employee to revise skills, have breaks / lunch, collaborate with coworkers, work on personal projects, exercise or even depending on your limits allow the employee to occasionally take the rest of the day off in the 2.5 / 3 hours spare.

Alternatively if the employee really wants to, the employee can carry on with his / her workload. It is up to the employee what he / she spends the 3 hours doing each day.

Companies bill work out at huge hourly rates, contract employees get paid rates that for the most part are 3 or 4 times higher than a standard employee.

If your employee earns £30,000 a year that equates to around £15 an hour at 8 hours work per day, at 5 hours work per day it equates to £24 an hour. What difference do these kinds of low figures make when you are billing clients out at £75+ an hour?

You are still making a huge profit on the employees hourly rate, do you really need to squeeze them for the full 8 hours to get your moneys worth?

Lets see …

Company 80 billable hours per day …

80 hours * £75 = £6000.

Employees cost per day …

80 hours per day at 10 (8 hour) employees at £1200 per day.
80 hours per day at 16 (5 hour) employees at £1920 per day.

The difference in money is £720 per day to offer the above system of working. Yes you have to provide for another 6 employees as well however at least you can gain the satisfaction of having a larger workforce.

The biggest bill is going to be the wages the rest of the payments for employee equipment etc is going to be far less.

Yes the system does cost money but it is the difference between making £4800 and £4080 per day.

Please note if its contract jobs we are talking about, then I would expect the employee to work the full hours quoted as contract employees are on a high hourly rate, the above only applies to standard employees.

Another alternative to the above “5 hour workday” would be to implement the “4 day work week” essentially the employee works 4 days a week but gets paid for 5 days.

Also note that none of the above ideas are an excuse to compress more or the same amount of work into less time. If that happens then the above advantage has obviously been nullified.

More holidays

20 to 21 days holiday entitlement a year? Increase it. I think for every 8 weeks worked an employee should be able to get around 5 days off work. This will double the holiday entitlement bill from around £2400 a year to £4800 a year on a £120 per day employee.

That would increase the cost from £6 per day to £12 per day for each employee that is an extra £6 per day for each employee. With 10 employees that would cost an extra £60 per day, with 16 employees that would cost an extra £96 per day.

Lunch around a big table together

The whole company should eat lunch together every working day preferably around a big table or multiple tables if needed.

Once a month meal

Once a month take the employees out for a meal, paid for by the company.

A lot of these points do eat into the profits however as stated if each employee is making a significant profit per day i.e. employee costs £15 an hour and is billed out at £75+. Then really a company should be able to afford some of the above described perks. This does however assume that each companies employee is booked out enough to make a profit.

In my multi person company this would not be a problem as I would only employee new employees as the work expands, for example I start out with 30 billable hours per week provided by 1 client. That would be just enough work for myself.

Later on I have 3 clients and 100 billable hours per week that would be enough to employee 2 additional employees as well as myself. If the work subsided then I would downsize the company. It would never be a problem as each employee would be generating a lot more money per hour than what I would paying the employee per hour.

These are the points I would implement in my business if I owned a multi employee business. Not all the points have to be implemented but the more points the better. Obviously if the workplace is toxic then none of the above points apply and employees will leave anyway but that is a different topic of discussion.

I want employees who are emotionally invested in the success of my business

The title of this article was a statement I read recently in an article on the web. There are lot of articles of this nature on the web so the topic is quite recognised. A lot of these articles mix into other subjects, one of those subjects being money.

The title of the topic basically becomes …

I want employees who are emotionally invested in making my company lots of money but I only want to pay them an average or below average salary. Who the hell is going to be emotionally invested that much in the success of your company unless you make it worth their while?

The same people who are sprouting this garbage are the same people who state “do not work for money, work for success” or something of a similar nature. The kind of success these employers are expecting are what I call “life work” success.

To explain, “life work” is something that a lot of people will do in there spare time unless they are lucky enough to be doing it full time. The people who are doing “life work” are people who invent something groundbreaking or write one of the best novels of the century.

George R. R. Martin the person who wrote Game of Thrones which is now a huge success spent years and years of his life writing the novel. This is not something that he is just going to do for some company for an average salary and most likely this is not something he going to do for any company no matter the salary.

When people talk about not working for the money and working for success, this is what they are talking about. It is not something that can be transfered to Uncle Bobs Print Business. This is what Uncle Bob is expecting however and all the people spouting the above garbage, he is wanting the “life work” of someone like George R. R. Martin for the peanuts he is paying him to work for his local print shop.

Somewhere along the line these employers have mixed “life work” and “everyday work” together. They want the benefits of someones “life work” but they cannot have it.

So lets take it a level down. Lets say Uncle Bob is not expecting the “life work” of some individual but is just wanting the same level of emotional investment he himself puts into his business. Right OK, Uncle Bob, how much are you going to have to pay that employee to put in the same level of effort as yourself?

To get the employee emotionally invested to that level he is going to have be like yourself. He is going to have to have a similar level of shares in the business as yourself or alternatively a wage that reflects that many shares.

Uncle Bob wants an employee who will do 100% high standard work, all the time. An employee who will stay late into the night most nights, if required. An employee who will pitch in to help with the administrative and accouting areas of the business after the normal days workload is complete. To expect this level of employee and get this level of employee at an average or below wage is unlikely to happen.

“According to The Intelligence Group, 64% of Millennials would rather earn $40,000 a year at a job they love than $100,000 a year at a job they find unfulfilling. That’s a pretty significant statistic.”

I read the following on a website preaching about the emotional investment of employees. The above in a way kind of backfires on itself because what kind of job are employees most likely to find “unfulfilling”, the kind of jobs where Uncle Bobs are wanting a high level of emotional investment i.e. staying late, high standards without fail, helping into admin / account areas of business after hours.

The exact kind of unfulfilling roles are the exact kind of roles that employers in this article are wanting their employees to invest in. So I am not sure what exactly the above quoted statement is getting at? What it seems to be implying is that Uncle Bob can get an emotionally invested employee who is interesting in making his business a success and doing a load of extra tasks to make his business a success for a 60% paycut.

Infact the opposite is the case, Uncle Bob generously agreed to pay said employee $100,000 a year, said employee got fed up with being expected to invest so much of himself into the business so quit the job and took a regular $40,000 year job where so much investment was not required.

I personally believe that companies can get emotionally invested employees. However to get the level of emotional investment the employer requires, shares would have to given to the employee or a wage that reflects that many shares within the company. Obviously the company has to be quite profitable as well as no one is going to invest in the company if it is only making £10,000 profit. The shares and wage reflective of the shares would then not be worth it.

To me it is just basic common sense, if you want an employee to be as emotionally invested as yourself then the “real” incentive has to be there. I think there is general problem in that the business owner should not be expecting the same level of emotional investment from his employees as what he himself has in his own business.