In an industry with high turnover, implementing employee retention programs can save your company thousands while building cohesion, community, and trust.
An article published in 2015 by Cleaning Business Today suggests that employee turnover in the cleaning industry runs anywhere from seventy-five to 300 percent. That’s an awful lot of turnover, especially when you consider all the new employees you have to recruit, hire, onboard, and train in the course of a year. (If you have a staff of 100 employees and a 75% turnover rate, that’s 75 new employees hired that year—three-quarters of your staff!) Here’s where good employee retention programs can enhance your business while saving you money at the same time.
What are employee retention programs?
Employee retention programs don’t have to be elaborate. The idea is to make your employees feel valued, appreciated, and recognized. Common perks deal with hours and wages, working conditions, promotions, and recognition, among other things.
Some businesses are hesitant to implement retention programs because of the upfront cost. However, what most of those businesses fail to consider is that employee turnover costs more. The Society for Human Resource Management (SHRM) estimates that average turnover for a single employee costs 6-9 months’ of that employee’s salary, and that’s the most conservative estimate; some studies suggest it’s even more.
Let’s break that down. The Bureau of Labor Statistics found that the median annual pay for cleaning industry workers was $23,440 in 2015. Six months’ worth of that salary would be $11,720. That’s the most conservative estimated cost of replacing one employee.
On the other hand, something as simple as a 4% pay raise would be $938. Even if you call it an even $1,000, you’re saving over $10,000 by retaining that employee (assuming a pay raise is all it takes).
Let’s take a look now at some common and effective employee retention programs.
1. Wages, raises, and promotions
It’s no surprise that the simplest retention programs center on money. Wages in the commercial cleaning industry are historically rather low, which means that employees are likely to go wherever the highest wage is. It behooves a company, then, to have competitive wages that top out on the higher end of that $23,400 annual median. In fact, a salary in the $30,000 range could save you money. Using the numbers above, if you can retain six of your best employees, you could save around $20,000 each year.
The financial incentives can’t stop there, though. Annual increases help retain employees since the raise will likely match the increase they might receive by changing jobs. Promotions—with raises—are also an excellent way to recognize a job well done. And the nice thing is that these can be discretionary. If you have employees underperforming, you can reduce the increase to 2% and withhold a promotion. Just remember you want to do all of this in conjunction with proper employee training and performance management.
2. Hire the right people
Of course, there’s more to employee retention programs than money. It starts with the people you hire. If someone views an opportunity with your company as an in-between job, reconsider hiring them. You want career cleaners to be a part of your organization. It might take an extra month or two of recruiting to find them, but it will save you loads in the end.
Nobody wants to work with people who don’t care about what they do. Hire employees who take pride in cleaning and want to do a good job. (And then remember to recognize and/or reward them when they do.)
3. Employee of the month
Employee retention programs often include an employee of the month designation. This acknowledgment should be made publicly during a company meeting or other all-staff event. The purpose of this isn’t to exclude others; it’s to give everyone something to work towards. Include an associated prize, such as tickets to an event or a gift certificate, to add extra incentive.
4. Regular training
Most people want to continue to better themselves, but training can be expensive and time-consuming outside of work hours. Provide in-house training that your employees can attend, whether it has to do directly with their jobs or not. Employee retention programs like this make employees feel valued as people, not just workers, and that makes them much more likely to stick around.
5. Don’t skimp on the benefits
Particularly with the rising costs of health care, quality benefits are important to many employees, and can be enough to keep them around for a long time. Yes, health care and other benefits are expensive, but again, weigh that cost against the cost of turnover, and you’ll find in most cases that it makes more sense to spend on the benefits.
Apart from health care, generous vacation time, flexible hours, commuter and parking benefits, and flexible spending accounts are all huge incentives for employees to stay put when the urge or opportunity to go somewhere else arises.