Employee turnover, it happens, especially in service businesses. Turnover has always been high in the cleaning industry and is one of the main influencers on profitability. Some turnover is unavoidable and predictable, which include seasonal work or employees jumping ship for a slight bump in pay or hours. Given the nature of the industry an elevated turnover rate is expected.
But, with labor being the largest expense a BSC faces and an industry turnover average of 75% or even as high as 400% per year, turnover is a major struggle for the Building Service Contractor.
To put these percentages into perspective, if a BSC has 100 employees and a 200% turnover rate, that means the company must hire 200 new employees each year. Every time an employee leaves, it costs the janitorial company an average of $1,000 in onboarding; recruitment, interviewing, background checks, training, etc. To sustain a team of 100 workers with a 200% turnover means the cleaning company spends $200,000 just on employee acquisition.
So, what can you do about it? Here are some methods that have effectively helped some BSCs:
Hire the Right People
It is crucial that a hiring manager first assesses the type of person they want to attract for a position. The manager can then determine where to look for that person, be it using an online job board or a local trade school to find someone good at working with their hands. It depends on the skills needed for the job and the personality type that will be a good fit. Make sure they understand the job requirements and your expectations. Ask relevant questions to see how they will fit and understand that they may not be an exact match, but with the right attitude and training can develop into an asset.
Have written procedures in place and train new employees on them during the first week of employment. Studies have that shown that many new workers feel an obligation to companies that have spent time and effort training them. Check in with them during the training process and make them feel comfortable with the job tasks. It will help them not only to perform better, but to also feel confident that they’re doing a good job.
Create training manuals, give hands-on training sessions and allow them some freedom to find their own way. Don’t forget to provide longer term employees the opportunity to cross-train new staff and to receive additional training for their own advancement opportunities. Ongoing training is a crucial part of successful employment.
Give positive feedback
A recent study found that 88 percent of employees reported “praise from managers—very or extremely motivating” and more important to them than money. *
Focus on the good. Recognize employees for a job well done. It may be a pat on the back or an employee of the month award, but continuously find the positive in their work. If employees make mistakes, use it as an opportunity to retrain them and show them you support them.
* Source: Badgeville, from a June 13, 2013 Employee Engagement study.
Offer competitive wages
Margins are extremely tight in the competitive janitorial industry. The largest expense is most often labor costs. While it may seem tempting to keep wages as low as possible to maximize profits, employee turnover can be expensive.
By offering a fair wage at or near the top against your local competition, employees are less likely to leave for a slight pay increase. Also, offering a 401K, bonuses and health insurance assistance can go a long way to retaining good employees and reducing new hire costs such as background checks and lost hours due to training.
Perform exit interviews
Even though you’ve provided exceptional training and a good wage, employees move on. Sit down with the exiting employee and give them a forum to be heard. Let them know you’d value their thoughts on how the company could be doing better and what they enjoyed about working with you. Let them know they can always come back and talk to you, that the lines of communication are always open. Have them feel like this is a positive transition in their career and that you support them. Their honest feedback can be used to enhance your hiring process, training programs and ongoing interactions with your existing team.
While some companies have implemented these practices, and have lowered their turnover rate, the industry average continues to be high. If you are looking to further your efforts and try less conventional methods and institute a unique company culture you may find it helpful to try these out-of-the-box methods to get more employees vested in your organization.
In the next post, we will offer some unconventional methods that, when combined with the conventional methods above, may reduce the turnover rate to a manageable level.
Thank you for reading. Please share with your colleagues who might find this of interest. Authored by Accelerator CC, providers of cloud-based commercial cleaning software that helps you profitably manage contracts, bids, operations, sales, and staff while providing advanced on-site inspection and quality assurance to your customers. One of the fastest-growing SaaS platforms on the market, Accelerator CC delivers an advanced level of automation, remote/field connectivity and built-in best practices that specifically target the needs of commercial cleaning organizations and their customers. To see a demo of Accelerator CC, please email firstname.lastname@example.org or call 610.849.5039.