Tony's Rant: Cheap and Cheaper

High employee turnover? An annual contract with the local newspaper's classified department? Here's what workers aren't telling you when they quit.

By Anthony Noel

We are going to talk a little this month about employee retention. If it is a problem for you, here is the reason: You're cheap.

(Please note that in columns labeled "Tony's Rant" — as this one is — I tend to be quite direct. Consider yourself warned.)

Now, you might be wondering how I can just come along and accuse you of being cheap, having never even met you. I can do it because cheapness is the root of all employee retention problems. Unconvinced? Fine. Let's try a little exercise.

Unconvinced: "What if my employees quit because they feel overworked?"

Irrefutable Truth: People can feel strongly enough to quit due to workload for one of only two reasons: (1) They are not making a wage that adequately compensates them, or (2) They are doing more work than one person can be reasonably expected to handle (which, really, are two sides of the same coin.)

If people are not making a wage that adequately compensates them for the quality and quantity of their output, paying them a wage that does will solve the problem. If you are unwilling to do that, my friend, there is just one word to describe you. It starts with C-H and ends with E-A-P.

If employees are doing the work of more than one person and you know it and you don't bring in the necessary help — you guessed it, cheap again. (Not to mention, quite ripe for a personal injury claim.)

U: "The labor pool here is shallow. I just can't find good help."

IT: There is no such thing as a shallow labor pool. Sure, some geographic areas have less skilled labor than others. But, in case you have not noticed, we are living in a global economy.

If you are willing to pay somebody to get the job done, you will find people to do it. Usually they will be right in your area. In the extremely rare instance where you cannot find someone locally, widen your search. If you still are not finding them, you are not offering enough. And so? Right. Cheap.

U: "But the cost of living here doesn't justify high wages."

IT: Puh-leeze. Highly skilled work — which is pretty much the definition of custom work — requires highly skilled people. If you expect low-wage employees to do high-quality work, well, we all need a dream.

U: "My other costs keep going up. I can't afford pay increases, too."

IT: The only "can't afford" that exists in our business is the one uttered by would-be customers who realize that custom work is beyond their means. Don't ever forget that, and do not let your goals be cheapened by the belief that you have to "hold the line on costs."

Certainly, you want to spend prudently and find bargains anywhere you can. That extends to your workforce. But a disgruntled worker is never a bargain; he is a train wreck looking for the worst possible time to happen.

A worker who does the job you need done and is content with his compensation package, on the other hand, is the best bargain you will ever find — no matter what the price.

One more thing on this: If you are the type of manager who waits for employees to ask for raises, you are doubly cheap. First, you are too cheap to let your workforce know it is valued. And, you are cheap again because you are hoping (admit it) that some folks never will ask for an increase. You are right — for reasons as far-ranging as upbringing to extreme introversion, they will not. What they will do, however, is quit, just when you are counting on them the most. Voila! One train wreck, per your request.

U: "Training new people is so time-consuming. I am already investing time and money in their training and don't want to pay them too much before I know they can cut it."

IT: There is not one thing wrong with making sure a new hire has the drive and ability to do the job before making him — and his starting wage — permanent. It is called a probationary period, it usually lasts 90 days and it is a smart policy.

The problem is, too many employers bring folks in at a low wage with no plan for 90-day performance reviews, let alone regular reviews thereafter.

Yes, training people is costly. The time and materials (i.e., money) spent in getting new hires up to speed can be downright scary, particularly if you check in on your new hire's progress hourly or daily (big, BIG mistake).

But ask yourself which is more likely to bring you long-term success: (1) Taking the time to cultivate reliable, knowledgeable employees with excellent initial training and, after those first 90 days, a nice pay increase that reinforces their value, or (2) an endless parade of departing workers whom you have paid just enough not to embarrass yourself, and the infinite training of the new workers who waltz through the other side of your revolving door. It takes a special brand of cheapness to choose "2."

U: "Actually, I pay my employees plenty and they work a reasonable number of hours. I have checked around and proven it."

IT: Then you are being cheap in some other way. Is your facility safe? Clean? Well-lit? Are managers respectful of employees?

A departing worker will seldom tell his soon-to-be former employer the real reason he is leaving. Smart people leave on the best possible terms, and telling one's boss, "You're cheap, I'm outta here," just doesn't happen that often.

Psychologists say that if the majority of our friends tell us we have a problem we need to deal with, we probably do. If your employees are voting with their feet, they are telling you, in the most direct way they can, that your business has a problem — or problems — it needs to overcome.

If you are constantly having to replace good workers, while the overall size of your workforce remains constant, take the hint already!

Send Anthony Noel e-mail at [email protected].



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