— by the Faith Driven Entrepreneur Team
Well-known business experts and global entrepreneurs regularly contribute to the Faith Driven Entrepreneur blog and podcast. As stewards of these archives, we’ve curated a number of voices to provide you with diverse perspectives on popular business topics. Our intent is that these fresh pieces of wisdom will guide you as you faithfully pursue your own business journey.
Since 2020, The Great Resignation has affected nearly every industry. As workers leave their employers in droves, executives have scrambled to figure out why people are quitting and how to make them stay. The front pages of every business magazine have been packed with think pieces and articles trying to answer this question.
The turnover situation is dire: the economy has seen a 57% employee turnover rate over the past year. Companies facing serious labor shortages are willing to try almost any retention strategy. However, no one has found a sustainable solution.
Faith Driven Entrepreneurs may be able to provide a unique perspective on this issue. What if we could pair the best efficiency models and hiring practices with the virtues of self-sacrifice and love. As followers of Christ, we are called to love our neighbors (and employees). But what does that look like in practice?
For those of you wondering how to reduce employee turnover, we’ve curated bits of wisdom from our faith driven contributors, CEOs in the field actively working to love their employees well. As it turns out, a faith driven approach to employee turnover can be wildly effective in reducing operational costs and boosting team morale.
Why Retaining Employees is an Important Goal for Businesses
Cost
The most obvious downside of employee turnover is cost. One HR report by SHRM says the average cost to replace an employee is $4,425. Ad space on Indeed, HR specialists on staff, and background checks all contribute to the price of making a new hire.
And that $4,425 is just the average cost across all employees. Want to hire a new executive? You may be looking at a $15,000 price tag.
Lost Production
Turnover affects company efficiency in two ways. First, when an employee leaves, you lose that employee’s highly-specialized knowledge. It takes time to hire someone with the required qualifications. It takes even more time to train them and introduce them to your teammates.
Second, your team managers could be working on client projects, but instead, they’re sitting in a third-round interview. Entire teams lose momentum when they’re asked to participate in the hiring process. Any team chemistry must be rebuilt from the ground up.
Morale
Dissatisfaction is contagious. According to Denise Rousseau, a Carnegie Mellon professor, “When a worker of a similar skill level quits, another employee may see that as a sign that there’s plenty of job availability; when a manager leaves, their direct reports may feel less tied to their jobs or feel resistant to working under new leadership.” When employees leave your company, the remaining people naturally ask, “Why?” which may lead to more critical perspectives.
Brand and Reputation
When people change jobs, they talk about it with friends and family. If enough employees leave your company, especially if your company hires hundreds or thousands of people, you may notice you’re not attracting the same quality of candidates you used to. That’s because they heard through the grapevine that your business isn’t worth working for. While people leave jobs for all kinds of reasons, it’s important to minimize turnover rooted in negative experiences.
Why Employees are Quitting Your Business
In order to fix a problem, you must understand the problem’s cause. Except in this case, the “problem” is people, who are complex, nuanced beings created in the image of God. If one-size-fits-all approaches worked (pay more money for instance), we would have seen an end to the Great Resignation articles and we might be seeing the end of steady competitive wage inflation.
To summarize our findings, the best course of action is to support employees’ “personhood” and not treat them like cogs in the machine. The following topics should explain more of what we mean. So, why are employees quitting their jobs?
Employees Don’t Feel Seen
One Inc. article reminds us that “77 percent of workers shared that loyalty to their company remains high when their recognition needs are fulfilled.” When people put in the effort and don’t receive any acknowledgment, they’re more likely to become burnt out and unhappy. This is especially true for remote workers who can fly under the recognition radar.
Employees See Failures in Leadership
A failure of leadership doesn’t always entail a deep moral failure. Yes, employees are likely to leave a company after a scandal, but we’re more talking about management failures. For example, Jon Christiansen writes for the Harvard Business Review that inconsistent expectations, too many process restraints, and leading with bias can decimate employee morale.
Employees Experience Too Many Work-Life Boundaries
It’s always important to make sure employees feel as though they have the right to keep work separate from their personal lives. But that said, many people leave employers for reasons completely separate from work. One highly-qualified HR expert says, “The big realization is that it’s not just what happens at work—it’s what happens in someone’s personal life that determines when he or she decides to look for a new job.” Anniversaries, illness, tragedies – these may push someone to rethink their life and search for change in their life.
Employee Retention Tips from Faith Driven Entrepreneurs
Here are five tactics to consider in order to reduce employee turnover.
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Be Disciplined in Encouraging Employees
A lack of recognition is a major contributor to the Great Resignation. A father can’t just sign a birthday card and think that’s all the recognition his child needs for the year. So why do we set the bar that low for managers, CEOs, and executives?
Megan McCoy Jones is the president and COO of McCoy’s Building Supply. It’s a family business, and some of her earliest memories were made in the office. But as she’s stepped into a larger and larger management role, she’s realized that loving her employees well takes discipline. Here’s what she shared on Episode 206 of the Faith Driven Entrepreneur Podcast:
If my goals are loving people, then I need some discipline around that. So I’ll give you an example. Every morning, six days a week, either my dad or I leave a voicemail for the company. We talk about sales and performance and company anniversaries and little motivational things.
We also have a system where our team sends an email every day about company anniversaries and birthdays. Now, that sounds really simple, but it takes discipline to make it go. I’m going to get on the voicemail every morning and leave this message and encourage other people. Thank them for what they’ve contributed. And we are a complex organization. We have about 3000 employees, a little over a billion in sales.
This isn’t small, it isn’t uncomplicated, and it takes a whole bunch of people working together. What I’ve learned about myself is, first of all, the discipline of lifting others up as a part of my everyday will not happen by accident. It will have to require some sort of system.
If we can learn anything about motivating and recognizing employees from Megan, it’s that we need to be disciplined about our encouragement.
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Be a Leader People Want to Work For. Be Vulnerable.
Inviting an inflated ego into the C-suite is a fast track to employee turnover. Don’t try to pass yourself off as a perfect lower-case “g” god. Your teams will see straight through your hypocrisy and no one will relate to you. Instead, try being vulnerable.
The Apostle Paul, one of the most effective leaders of the early church, describes himself as the chief of sinners. He wasn’t afraid to expose his own weaknesses if it meant lifting up the church. And what was the result? People were willing to listen to him and live gospel-led lives.
President of the Faith Driven Movement, Justin Forman, says, “Nothing is more repulsive than the fake polish of a story that hides the truth. Nothing is more attractive than the soothing grace of the gospel piecing together our brokenness.”
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Don’t Isolate Yourself. Ask for Feedback
Receive feedback from mentors and colleagues. If you don’t, your blindspots will erode any confidence your employees have in you. Unfortunately, many entrepreneurs can be bad at seeking feedback, but that’s not an excuse. Isolation can be devastating.
Dan Owolabi works for Branches Worldwide and has interviewed numerous entrepreneurs. Isolation is a common theme in these conversations. According to Owolabi:
Isolation allows leaders to maintain an illusion of control. We can easily avoid uncomfortable conversations when employees rarely give unvarnished feedback on our leadership or when our boards are disengaged in our day-to-day performance. So, when we make decisions, set goals, and create systems apart from a community of high-capacity peers, we can easily avoid accountability, sidestep taking responsibility for poor choices, and stop challenging ourselves to be better.
Being a leader people want to work for and being a leader that asks for feedback go hand in hand.
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Establish a “Why” for You and Your Company
Companies can’t afford to neglect mission and meaning. Young people entering the workforce prioritize workplaces that embrace more than simple bottom-line numbers or exceptional products. Employees want to “make a difference” and “work with purpose.”
Sometimes this language can sound fluffy and impractical, but Tom McGhee, co-executive director of the Halftime Institute, provides a helpful framework for honing in on your organization’s purpose:
We believe [companies fail to become movements] because they fail to recognize the totality in this type of shift—that this is not about adding a new product or service or about re-organizing or re-branding. This shift requires a fundamental change in the essence of an organization. It is about whole-scale cultural change—change that is both internal, how the organization behaves, and external, how the organization is perceived and the value it creates.
You must be willing to question not just how you do things but what you do and why you do it.
In his book, Good to Great and the Social Sectors, Jim Collins references a concept he calls “The Hedgehog.” The hedgehog is the essence of who you are and what you do. For social sector organizations like Halftime, the hedgehog is at the intersection of three circles: What you are deeply passionate about, what you can be the best in the world at, and what best drives your resource (or economic) engine.
Find ways to clearly communicate these three areas to your people. What is the business deeply passionate about? What are you the best at? And what best drives your resource engine? Then flip the script and allow employees to verbalize these questions for themselves. The strongest businesses align individual purposes with a wider communal purpose.
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Provide Support for the Whole Person Through Corporate Chaplaincy
At Faith Driven Entrepreneur, we’re strong advocates for corporate chaplaincy. A corporate chaplain is simply someone who can provide emotional and spiritual support to the broader organization. They’re able to talk to employees about real-life concerns without the awkwardness of opening up to a direct supervisor.
Research shows that personal life events can make people feel as though they need to change jobs just to take a breath of fresh air. But if your business has a corporate chaplain, employees may see your business as a place of peace and stability, somewhere to turn for emotional support when their personal lives become hectic.
To learn more about corporate chaplaincy, watch this video.
Loving Employees is at the Heart of Reducing Employee Turnover
In the end, it’s not all that farfetched to say that reducing employee turnover is rooted in love. How can we as entrepreneurs love our employees in order to create a sense of belonging and serve customers through excellent products and services?
This probably isn’t the first article you’ve read about The Great Resignation. We hope that this article provides new perspectives on employee retention. However, the challenge now is to get up and put these tips into practice.
If you’re wondering where to start or if this challenge sounds overwhelming, join one of our Foundation Groups. Join a group of other business leaders and dive into rich content while developing relationships. You don’t have to do it alone. Click here to learn more.
God wants a relationship with you, so it’s not just about solving problems! And, as you deepen your relationship with God through prayer, it becomes easier and easier to know His will for your life and your life and your entrepreneurship.