Poor staff retention can have a devastating effect on SMEs but the cost is not merely financial. Tracey Porter looks at what you can do to make your practice a place where employees are eager to stay
On any given day Kim Dale is responsible for the physical and mental wellness of more than 20 adults and countless animals.
As the Orange Vet Hospital’s (OVH) practice manager, it falls to the busy mother-of-three to help ensure each of the practice’s seven vets and 14 support staff are operating at the top of their game so that when the doors are opened each morning, incoming patients can expect the very best care the staff have to offer.
The 41-year-old’s dedication to her job is part of the reason OVH enjoys low staff turnover with flexible working arrangements, regular appraisals, open lines of communication, educational opportunities, frequent social gatherings and all-inclusive meals. These are all part of the ongoing commitment OVH offers its staff.
“We don’t have difficulty finding staff as we have always employed for attitude and trained for skill. If you look after your staff well, it isn’t that hard to keep them. We encourage our staff to continue their education and challenge themselves.
“It is natural for staff to turn over and while it is always disappointing when you lose a team member, if you have developed a strong team, they can pick up the pieces and fill the gaps easily.”
Research by various human resources firms both here and abroad suggests 50 per cent of the people recruited to an organisation will leave within two years. One in four will leave within six months.
Besides having a negative impact on a small business’s reputation to attract and retain great staff, frequent employee turnover can also have a catastrophic effect on productivity, morale and the company’s bottom line.
While it is difficult to pinpoint the true financial cost of employee loss, Australian insights group Mercer estimates that staff turnover costs range from 50 to 150 per cent of an individual’s annual salary depending on the role and level of seniority they enjoyed.
Even at its most conservative, a practice employing a veterinary nurse on around $40,000 a year would need to find around $20,000 in recruiting and training expenses to replace them.
Employment law barrister Edward Mallett, whose consultancy Employsure works with several Australian vet practices on employment relations and workplace health and safety, says while some staff turnover is normal, questions need to be asked when a small practice is losing “anything over 30 per cent of their staff” every year.
Staff turnover can be influenced by numerous factors with location, the age of the business and the seniority of its workforce each playing a part, he says.
The Frawley Report, a review of rural veterinary services in Australia published in 2003, found rural vets had to contend with a lot of unique factors that vets based at urban practices did not—all of which impacted on their willingness to live and work in rural areas. These included rising costs, a reluctance of producers to utilise their services, long hours, limited social opportunities and available schooling for their families.
Mallett argues that spikes in staff turnover in new businesses are common as these businesses have yet to cement themselves as an employer in quite the same way as more established businesses.
In addition, the age cross-section of a business can also have an impact on staff members’ willingness to remain at their place of employ.
“You tend to see higher turnover in younger staff—it’s often referred to as the Generation Y phenomenon. A couple of generations before that, jobs were seen as something you probably did two or three times in your career. Now it’s not unusual at all for someone younger to spend a year at a job and think that’s a decent amount of time.”
While the introduction of the Fair Work Act and other enterprise agreements—in particular the Animal Care and Veterinary Service 2010 Award—have resulted in a more level playing field when it comes to the remuneration and entitlements offered by the sector, Mallett says few staff are compelled to leave a workplace simply because “one down the road may be offering a higher salary”. More likely their dissatisfaction will be driven because there is an issue with the culture of the work space or it is a personnel issue, he says.
There is scant evidence to suggest that other tactics such as offering additional annual leave, volunteer days or overseas sabbaticals have a large impact on a worker’s willingness to remain loyal to their employer, he says.
“We’ve got about 6000 SME [small- to medium-sized enterprise] clients and very few, if any, of those clients would have lots of structured perks in place, such as additional parental leave. That’s just not the reality for most small business.”
Instead, Mallett argues, practices seeking to stem the tide of high staff turnover should think long term rather than employing quick-fix solutions.
The starting point for retention is always selection, he says. “If you keep picking the wrong people and keep having to move them on or they keep leaving, you’ve probably got something wrong with your recruitment process.”
He also cautions against the “Googlising” of the workplace, where items such as bean bags and ping pong tables are introduced as an incentive to make the business more relevant and encourage staff to stay.
“That is not the way to do it,” says Mallett. “Check the foundations are right—are you paying people correctly and are you treating people right, fairly and safely? If you’ve got that right, then you get into the cultural stuff that typically doesn’t mean lots of expensive things. It may mean just displaying an open and flexible attitude when someone asks for additional time off, creating a culture in the business of honesty, making it absolutely clear that it’s fundamental for all your employees that they have to be honest with you and you’ll be honest with them in return.
“If you create that culture where people are honest and not dancing in shadows, you’ll go a long way.”