5 ways to hold on to more of your employees for longer
As a business owner, do you or your managers spend a lot of time recruiting, conducting exit interviews, and onboarding new staff?
When the ‘revolving door’ in and out of your business doesn’t stop revolving, it can impact so many parts of the business that it soon becomes a priority to address the problem.
A high staff turnover rate doesn’t just impact those doing the hiring. It is damaging for general motivation, performance and productivity; it may lead to negativity in the workplace culture; the cost of hiring eats into profits; training and development costs go through the roof; and, worst of all, the chaos that can result from a constant flow of new faces in the business flows outwards to customers – and may cause them to look elsewhere.
So what can you do about this?
Well, say you want to improve performance in the workplace. It makes sense to understand the main reasons why employees are unmotivated and underperforming.
Similarly, if we want to improve staff retention, it makes sense to examine the reasons why people leave their jobs.
In recent years Gallup polls have found the same reasons for leaving have tended to come up again and again.
While there may be some unique circumstances in your own business that contribute to the problem, focusing on the following five steps will help address the main concerns…
1. Provide strong and inspiring leadership
Poor leadership consistently tops the list of why employees leave. There seems to be a lot of truth in the saying that people don’t leave jobs — they leave their bosses.
We’ve all had the experience: you’re feeling a bit under the weather, the alarm rings, and you’re faced with a choice: struggle out of bed and make it into work against your best judgment — or stay put.
Your choice is often determined by your boss. You’re much more likely to stay in bed if you don’t give two hoots about him or her.
So, unless you’re able to position inspiring leaders at the heads of your teams, this mentality spreads across the entire organisation. Are your leaders providing the support, guidance, and mentoring that employees look for?
Do they have the emotional intelligence and people management skills to really lead people – or are they in a leadership position based purely on technical skills and experience?
It’s worth noting that it’s the perception of your employees that counts here. You may think you have great leaders in place but if people are heading out the door in droves, it could be the first place to look.
2. Pay strict attention to employee needs
Unless you have a system of gathering employee feedback, you probably don’t understand the needs of your employees. You may think you do but in reality it’s just guesswork.
An annual performance review is not going to cut it. Face-to-face meetings between leaders and employees need to be frequent, forward-looking, and based on constructive ideas for development; rather than infrequent, based on past performance, and only considering KPIs.
Unless there is an effective feedback system in place, you may never know when problems are brewing before it’s too late – and people start heading for the doors. In short, get closer to your employees.
3. Develop career paths and opportunities for growth
Unless you offer your employees a realistic opportunity of advancement, they will quickly try to find an organisation that does.
A perceived ‘dead end’ job with lack of opportunities for development is highly de-motivational and generally gets people looking around, sooner or later.
People want to grow and develop themselves — this is natural within all of us.
Once you understand your employees’ goals, it’s important as leaders to help develop people and set them on the right path to achieve these goals. In professional terms, this means some sort of career path.
It’s considered unfashionable in some quarters to stay with a company for an entire career nowadays — and it’s true that ‘job hopping’ is much easier than it used to be. But many companies seem to encourage talent drain by not providing a compelling enough reason for employees to stay.
People require direction, hope for the future, meaning in their work, recognition, opportunity, and challenge — these are all strong motivators.
4. Provide more flexibility in the work environment
People are more aware than ever about the importance of their own wellbeing.
They realise that sedentary lifestyles and stress contribute to a range of other factors in leading to poor health.
Many employees are looking for more flexible work environments that allow them to strike a better work-life balance; everyone is familiar with the available mobile technology, which means they don’t necessarily have to be in the office to be at work.
When they are in the workplace they want it to be more inspiring and conducive to a healthy lifestyle: standing desks, places to workout, and so on.
Rather than asking your employees to sacrifice personal needs to fulfil the requirements of the job, design the job around changing lifestyles that are more mobile, flexible and geared towards healthy living.
5. Focus on improving your workplace culture
Do you promote a culture of recognition, accountability, engagement, transparency, reward, positivity, and success — or do your people cast envious glances towards the competition?
In some workplace cultures, the opposite dominates: silos develop and conflict, secrecy, fear, threat, and negativity all lead to de-motivation, which in turn leads to a decline in both performance and the employee experience of actually coming to work.
Your top employees naturally gravitate towards positivity and harmony and are unlikely to hang around in an environment they perceive as toxic or harmful to their growth.
Build teams that cultivate a positive culture through connectivity, empowerment, engagement, and a sense of fun.
Final thoughts
There will always be a turnover of staff in a business. But surprisingly perhaps, money is not usually the main reason for leaving.
It’s obvious that you should be paying employees well for the work they do; and you can’t do much about employees leaving to go travelling, fulfilling a long-held ambition, starting a family or moving to the other side of the country.
However, many of the main reasons for employees leaving can be addressed at the source by every employer.
Resist the temptation to think that high staff turnover is simply a sign of the times; with the immediate and temporary nature of social media, some business owners accept poor staff retention as the ‘new norm’. They believe that people are simply ‘job hoppers’ nowadays.
However, as a leader you can take action to stop the talent drain: by focusing on the above five actions, you will start to close the gap between where you want to be and where you actually are now.
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One of the most powerful decisions you can make with your superannuation is whether to run your own self-managed super fund (SMSF) and whether to invest in property through it. Most people know it's possible to use super to buy property. Far fewer know how to do it well. The following seven tips are designed to help you make the right decisions. 1. You Can Borrow Money to Purchase Property in Superannuation. Don't have enough in your SMSF to buy an investment property outright? Since 2008, superannuation held in a self-managed super fund can be used to borrow money for property purchase. This is done through a 'limited recourse loan' using a Bare Trust as the Custodian entity. You can't borrow the total value of the property—typically it's up to 80% for residential properties and 60% for commercial properties, with the required deposit held in the SMSF as security. The SMSF then makes the loan repayments, with rental income received by the fund and property expenses paid by the fund. Importantly, if there is a default on the loan, your other assets in the SMSF are generally protected from standard debt recovery and bankruptcy proceedings. The lender only has recourse to the property itself. Upon completion of the loan repayment, ownership of the property transfers legally to the SMSF. 2. Follow These 8 Steps to Set Up Your SMSF Setting up an SMSF properly can be a complex process. It’s best to set up an SMSF with the assistance of a qualified superannuation advisor, like us! We can assist with both the initial setup and the ongoing management of your fund. There are eight core steps to SMSF set up: Select the appropriate structure and name Sign the trust deed that covers how your SMSF is set up and run (it can have up to four members) Establish a trust for the SMSF by investing assets into the fund Register your SMSF with the ATO Set up a separate bank account for your fund Submit your tax file number (and those of any other trustees) Obtain an electronic service address to receive employer contributions into your fund (if applicable) Roll over funds from your existing superannuation account into your SMSF 3. Keep a Liquidity Buffer If you're buying property through superannuation, make sure you plan to keep a liquidity buffer of cash and/or shares in your fund. Lenders will check for this before lending to you—it should be at least 10% of the value you intend to borrow. But beyond satisfying the bank, it's simply good risk management. Property is an illiquid asset. Having accessible funds in the SMSF means you're not caught short if repairs are needed, the property sits vacant, or an unexpected expense arises. Because superannuation is central to most Australians' retirement security, the government has carefully regulated what can and can't be done with it. They don't want people gambling their retirement away on poor investments or incorrectly using their superannuation fund. 4. Use the Rental Income to Repay Your Loan You cannot live in the property you purchase through your SMSF until after retirement. Most people purchase an investment property and use the rental income generated to repay the loan—which makes excellent financial sense. The key is selecting a property that rents easily and delivers a strong rental return. Your purchasing criteria may look a little different to buying a home you'd live in yourself. For example, proximity to public transport, local amenities, and average rental rates in the area matter more than personal preference. 5. Get It Right and Enjoy Significant Tax Efficiencies One of the most compelling reasons to invest in property through superannuation is the tax efficiency on offer. These benefits can significantly improve the long-term return of a property investment compared to holding it in your own name. Key tax benefits include: No capital gains tax or tax no yearly investment earnings if under super caps. Salary sacrifice advantages if you're sacrificing salary payments into super, loan repayments are effectively tax deductible. Capped tax on investment income—the maximum rate of tax on income after expenses is 15%. Any capital gains on investments held for 12 months or more, is taxed at 10%. Standard investors outside super can pay up to 47%. 6. Follow the Same Due Diligence Rules as Any Property Purchase Buying through superannuation doesn't mean relaxing your standards. If anything, the rules governing SMSFs mean you need to be more rigorous, not less. Property is likely one of the most significant financial decisions of your life. Research, not emotion, should drive your choices. The same rules apply whether you're buying in or out of super: Visit and compare multiple properties Know the values of similar properties in the same area Get all property checks performed by the right professionals Shop around for the right loan structure and lender Don't abandon good investor habits just because the structure is different. 7. Always Get Quality Professional Advice Nothing comes without risk—but the right advice significantly mitigates it. The key is understanding what you're getting yourself into: making informed decisions based on accurate data; keeping a diversified superannuation portfolio that doesn't place all your eggs in one basket; and not underestimating how complex buying property in superannuation can be. Sound Simple? It’s all in the details. If the above tips have made it sound straightforward, know that the detail is where the complexity lives. Getting professional advice from the start helps ensure you make the best possible decisions for your future. When selected according to rigorous property-purchasing criteria, property can be an excellent way to grow your superannuation and increase your chances of building a retirement fund that supports the lifestyle you want. Ready to Explore Property in Your SMSF? Whether you'd like to discuss whether an SMSF is right for you or need help setting one up, reach out to Ascent Accountants . If you want assistance managing the property within your fund, contact the Ascent Property Co team .
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