Develop and retain your staff

Develop and retain your staff

By Rick Braa, CHAE      


This year has been difficult to find people and keep them. The labor market seems tight and when I try to hire a person, from a dishwasher to a manager the money they’re asking for is higher than what I’m paying my long-term employees. Turnover in my business is as high as it was before the recession. At this point, what should I be focusing on to stabilize my workforce?


Turnover is expensive. One can safely estimate the hiring and training costs of an hourly worker averages above $1,000 and a manager above $10,000 plus unquantified costs such as guest retention and guest complaints. Intense focus must be paid to every individual on the team and performance and potential noticed and rewarded. To compete and win the race for talent, consider the following tactics:

RickBraaChartforwebAnalyze performance and potential together—use the nine-box matrix, believed to have been developed by McKinsey Consulting for GE in the 1960s or ‘70s. The approach is simple. Performance on x-axis and potential y-axis: 1A would rank high potential and high performance, 3C would rank low potential and low performance. The goal is to have a mix of people on the team that perform at a high level regardless of potential and develop each individual to maximum individual potential whether that is low, medium or high. For example, decisions with a 3C are simple; that person was likely a poor hire or has developed irreversible habits and needs to be replaced. 1A is self-motivated, owns the work and solves problems. These are your star players who need difficult issues to solve and added responsibility. The questions marks really arise with those that have high potential, but aren’t performing well. Those are the individuals to focus on first. Find their motivators and stretch performance with constant coaching and attention.

Use a development plan for every person—everyone has goals, personal and professional. Some want a job, some want a career. Regardless of the drive of the individual, it is the responsibility of the operator of a business to enrich and enhance the development and professionalism of the employee. The key to unlocking performance is through the gateway of development, using a development plan formalizes the process and contributes to achievement. A development plan begins with the assessment of performance. Schedule a performance assessment where you and the employee assess his or her performance level. Once the assessment is complete, discuss three goals to elevate performance to the next level. Agree upon goals that are specific, measurable, attainable, relevant and timely (SMART) that benefit the individual and the business. Meet at least twice per year to make sure progress is made on agreed upon goals and the development plan. Push this process through the business.

Pay competitively—with the recent escalation in minimum wage and the tightness of the labor market, wage inflation is a reality. It’s important to approach compensation from the perspective of what you would pay to keep an employee. Recruiters are scouring the workforce, and you can be sure your people are a target if you have a respectable business. During this time, it’s important to adjust to the market. Many businesses have employees that are below market pay due to longer retention. While this has short term benefit, great long term employees have efficiencies that create additional value a business cannot afford to lose. Be sure to reward those employees with the highest rate, not the lowest. You will likely have to adjust pricing or drive more guests through the door to cover the additional cost, but it’s worth it.

By assessing talent, implementing development plans and paying at market rate or better, retention of supreme talent increases, healthy culture persists and profits soar. n

For a more information on improving profitability and driving performance, contact AMP Services at Rick Braa is the co-founder of AMP Services, an accounting and consulting firm specializing in helping companies grow profitability.

(Source: Washington Restaurant Magazine, August 2015)