We budget for marketing. We budget for health insurance. We budget for raw materials. It seems we budget for EVERYTHING! The only thing we don’t intentionally budget for is employee retention. So, all the initiatives in employee retention have to come out of some other pot of money. When that happens, leaders are reluctant to take things out of their budget that normally would go towards what they see as “core” activities. When that is the case, employee retention takes a back seat.
This employee retention expert recommends setting up specific line items in the various department budgets. This requires HR to be integrally involved in the budgeting process, so employee retention is somewhere in either the HR budget or in a department’s budget. When these discussions are taking place, limited resources are always an issue. One CFO I was working with at a client made it easy. He calculated what employee turnover was costing and said, “Employee turnover is costing us $600,000. Let’s take half of that and build it into the budgets to address the issue.” It was logical and it put resources to bear on a major issue they were struggling with. It was a well-thought-out approach to their problem.
By using the approach above, it forced the organization to think about their employee retention strategies. As they thought about it, they budgeted for communication, employee training/growth, and many of the other things that impacted employee turnover. They used the budgeting process to force them to think about what they were actually doing in the area of employee retention. It brought focus. Guess what…it worked!
All too often, employee retention is an issue, but it is treated as an afterthought. It needs to come to the forefront and the problem attacked aggressively. When this is the case…results will begin to happen. The first step in this process is to budget for employee retention!
Are you struggling with employee retention? If so, send an email to email@example.com with the title, “I’m desperate” in the title line and I will reach out to you and show you how to significantly reduce your employee turnover.”