Retain Your Best Hires
It’s Good for Business

Posted 7/16/2012
By Terry Wynter, AAM

Ask any small business owner about the most challenging aspect of running a business and many will reply, “Finding and keeping employees.” It is a constant challenge, but it can be minimized by understanding what motivates employees and by implementing a few strategies as proactive measures instead of reacting to personnel situations as they happen.

Plain and simple: Employee turnover is expensive and retaining your best hires will increase the bottom line for your business. Many of the costs associated with a replacement employee are easy to quantify, such as recruitment, hiring and training costs. A rule of thumb is that replacing a staff member will cost one third of his or her salary.

There are also costs to the company that cannot be quantified. We can’t measure the impact to remaining employees’ morale when a valued co-worker departs. Many times a redistributed workload increases stress for employees, and one cannot deny that there is a negative impact on customer service at some level in this situation. We can’t measure customer loyalty to staff, but, since people do business with people, one can assume that high turnover will influence customer loyalty.

Another hidden cost is a business’ reputation in the community as an undesirable place to work. It is difficult to attract top talent with a less-than-stellar reputation as an employer. The loss of desirable, talented staff is costly … with a price tag higher than most business owners perceive.

Successful employee retention begins with good hiring practices. The source of applicants is critical for reaching quality candidates, and we have found that while this has changed over the years, one constant is that current employees or other people in the industry –  such as parts suppliers and tool distributors – are the best referral sources.

Once the most qualified applicants have been background screened to a few of the most qualified, prepare for an interview. During the interview, avoid the tendency to just speak about the job or have the candidate speak about himself or herself. Ask open-ended questions, such as giving customer service or technical scenarios and have the prospective employee tell how he or she would solve the problem.                        

Ask about their best manager in the past, what motivates them for their best performance, what has made them the most proud … all of these will help you determine their character and fit for your organizational culture. Spending time getting to know the candidate is time well spent. Afterward, a 90-day trial will further confirm your selection as a good fit for the company.

There are a number of myths concerning employee satisfaction, and one must understand these prior to implementing an effective retention strategy.

Myth 1: People will always leave a company for more pay. Yes, pay does matter; however, research shows that most people don’t leave a job for more money. They typically leave due to dissatisfaction with a supervisor, working conditions or company policy and procedures.

Myth 2: People don’t want more responsibility. This is not to be confused for more work if someone is already overloaded. People need the opportunity to grow and develop their skills while having greater control over decisions on accomplishing work assignments.

Myth 3: Loyalty is dead. Typically, workers change jobs more often than in the past. However, today’s employee is loyal to a company’s values and practices and not just the company. To encourage loyalty, a business must recognize that the employee’s needs are interrelated to those of the business.

Myth 4: Improving employee satisfaction is expensive. The good news is that most of what leads to employee satisfaction cannot be bought. Genuine appreciation for a job well done, management that listens and good relationships are some of the priceless satisfiers.

Employee retention matters to the health and future of a business. In recent years, we have noticed less of a tendency for employee movement due to the economy and the fact there are fewer jobs. This will change as the economy improves. Also, as the baby boomer generation continues to retire, the next generation of potential employees is much smaller. It is also unfortunate that our industry has not attracted a proportionate segment of younger candidates to replace the retiring baby boomers. All of this means that a working employee retention program will continue to be an integral part of a successful business.

What are the critical components to a business philosophy for the purpose of employee retention?

There are five that emerge as priorities:

1. Quality Supervision – People more often leave supervisors than they leave their job. Anything an employer does to make a person feel undervalued will contribute to turnover. Super­visory skills can be improved by making sure that the employee receives clarity about expectations, clarity about earnings potential and feedback about performance.

2. Learning and Development – Quality employees consider training and development a priority, and a good program in your business will enhance retention. We are very fortunate in the automotive repair industry as quality training is available through multiple sources, such as suppliers, manufacturers, private educators, and associations such as ASA. Many shop owners have de-emphasized training with the attitude that after training an employee, he or she will leave for other employment. Learning and development will actually result in positive retention when used consistently as part of a total retention package.

3. Contribution Encouragement – Employees that are encouraged to contribute to how work gets done and kept informed are more loyal. People care about their work and appreciate knowing their efforts help the business and the customers. In the day-to-day operation of a busy shop, regularly scheduled meetings are an effective tool for interaction with the staff.

Douglas Kirchdorfer, AAM, owner of Downing Street Garage in Denver, has a weekly lunch meeting where he takes the opportunity to communicate his shop’s business philosophy and goals. The first item on the agenda is always acknowledgements for the week.

At Terry Wynter Auto Service Center, we have a management meeting every two weeks after hours where employees are encouraged to speak freely and ideas are shared openly. At each meeting we have a “round table” where everyone shares one thing they have learned in the past two weeks. Recently, we set up email addresses for every employee as a practical way to share information, keeping employees in the know. There are many ways to accomplish the goals of encouraging contributions and keeping employees informed, all of which will lead to a more engaged staff.

4. Fair Pay and Benefits – Pay does not matter to the degree that many perceive. Employees want to feel that pay is fair within the company and industry. In relation to pay, employees need to know the behaviors that contribute and lead to pay increases. For example, at Terry Wynter Auto Service Center, we pay technicians on a scale based on the number of ASE certifications achieved.

Take a look at any list of the best places to work, and you will find companies that feature attractive employee benefits. A company sends a strong message when benefits are in place that impact the well-being of employees and their families. As John Vallely, AAM, owner of McLean Auto Repair in Elgin, Ill., says, “Employees are people first and employees second. I would do most anything to improve their quality of life.”

Betty Jo Young, AAM, owner of Young’s Automotive Center in Houston, encourages shop owners to “think outside of the box” when it comes to benefits. It is certainly an area where creative thinking can give your business the edge in employee retention.

5. Respect – There is a direct relationship between respect for employees and low turnover. Companies that work to minimize the traditional gap between management and workers will benefit from their efforts. Kirchdorfer says, “Praise employees in public and criticize in private.” An additional benefit of top-down respect is that employees will pass along how they are treated to your customers, which leads to better customer relations and service.

Once an effective retention program is in place, it helps to recognize that all turnover is not problematic. As careful as we are, hiring missteps are made or changes to employee situations occur. These should be handled with care, using an exit interview to determine if any adjustments to policy should be made.

Terry Wynter, AAM, is owner and manager of Terry Wynter Auto Service Center in Fort Myers, Fla. He is a member of the Automotive Service Association’s Mechanical Division Operations Committee. He can be reached at terry@terrywynterauto.com.