The cost of finding new customers far exceeds the cost of keeping established ones.
The same holds true for employees. While retention practices are often equated with bloated salaries and costly perks, the truth is, many business owners keep their best performers without excessive spending. The value of these best practices in retention is, quite simply, priceless.
Parker Hannifin Corp. incorporates traditional business practice standards to increase job satisfaction throughout its organization. Viewing employees as valuable equipment that keeps product moving, Parker's top management has established methods to maintain its work force.
A younger company, Market.al, works within a tighter budget but does not sacrifice high standards to keep its staff. With a belief that small businesses need more than a public relations agency, Market.al was formed to develop marketing plans and programs along with ad campaigns for growing businesses.
No matter the size of your company, the importance of retaining and retraining a work force cannot be stressed enough. While deep pockets and far-reaching resources allow for more extensive programs, the basic principles and processes remain identical, whether you are a global industry leader or a small niche-oriented firm.
Apply proven processes to people
Many members of Parker Hannifin Corp.'s management staff have 20 to 30 years of service at the company. But long-term employment is not unusual at any level of the organization, says Daniel Serbin, vice president of human resources.
The manufacturer of motion control products, fluid power systems and electromechanical controls has 45,000 employees in 45 countries. According to Serbin, one of the company's competitive strengths is its employees and its ability to keep them using methodology similar to Parker's manufacturing processes.
"Our whole culture is continuous improvement," Serbin says. "What worked five years ago may not work today."
Not including workers at Parker's recent acquisitions, the average length of service at the company is 13 years worldwide for hourly employees. Serbin attributes part of the company's retention success to its structure -- individual locations typically employ only 200 to 300 people.
And, although there are higher costs associated with smaller divisions, Serbin says it is good for employees, as well as for the customer base. Affording greater focus on the market allows the company to respond quickly to what customers want and not lose sight of employees who excel.
"Our culture, being so decentralized, affords people the opportunity early in their career to come in and make a mark," Serbin says. "It's not like they're coming into a facility where there are 2,000 people and may get lost."
Good recruiting equals good retention
The search, interview and hiring process is equally as important as what happens once a new employee walks through the door, Serbin says.
"Our goal is to hire the right people and make sure they have a career (at Parker)."
For example, new sales engineers are put through a 12-month training program before being assigned their own territory.
"If we would lose people that we put through a training program for a year, it would be very expensive for us," Serbin says. "Recruiting well means a higher likelihood of retention. We're trying to find employees that match our culture."
Develop a culture of ownership
Part of Parker's cultural style has consistently included the team concept that became popular in the 1990s. Since he joined Parker 21 years ago, Serbin says the team philosophy has been in place with an "ask culture instead of a tell culture."
Slightly fewer than 50 percent of the organization's plants are managed with self-directed work teams. Taking on responsibilities typically given to a supervisor, employees do everything from purchasing equipment to creating a more productive environment.
One key to the team concept is good communication.
"Having honest dialogue, you're much more likely to succeed in keeping people," Serbin says. "If you hear what they want to do, then you can put a development plan together. Development is for everybody."
To contribute to the feeling of company ownership, all employees are offered the opportunity to take a financial class called Biz Whiz, which explains how to read financial statements and how all the manufacturing processes link together to affect profits.
Explains Serbin, "We want people to understand the finances of the business so they can contribute to help running the business."
The priceless perks of Market.alEight years ago, Ellen Moriarty and John Sancin were recruiting clients from Sancin's basement.
Today, along with a third partner, Eugene Bernhard, Market.al's client base includes Harley Davidson's Dealership System Management Division, Cole National Corp., Norandex Inc. and Fuelman of New Orleans. A staff of 14 serves customers from Ohio to Arizona.
Moriarty, vice president and chief operating officer, attributes the company's success to a creative, dedicated, hardworking staff and a relatively low rate of employee turnover. With smaller reserves to work with, creativity has become a key element in the firm's ability to keep its employees.
Offer the comforts of home
After outgrowing its office in Independence, the company moved to Broadview Heights and discovered the hard truth that atmosphere plays an important part in attracting employees, creating job satisfaction and retaining employees.
Market.al occupies a 7,000-square-foot building that more resembles a ski chalet than an office. Two wood-burning fireplaces and 2,200 square feet of decking enhance the homey atmosphere. The building overlooks a natural wood setting.
With a fully stocked kitchen and outside grill, breakfasts, lunches and even late-night dinners are never an issue. Because deadlines and not the clock drive the work hours, Moriarty says the kitchen is a necessity. And, while vending machines may be enough for other businesses, the comfort of a kitchen table not only provides a place for tossing around ideas, it also acts as a meeting room for training.
Weekly "No Free Lunch" training sessions allow the staff to come together with speakers or watch videos on best practices in the industry. The only cost is the person's participation.
Create lasting value
While credentials and experience are important, Moriarty explains, "We were looking for people that had a great attitude, an eagerness to learn."
Having experienced the corporate America atmosphere, Sue Grzybowski says working at Market.al is gratifying because everyone is on the "same playing field."
"What we think and what we do are valued," says Grzybowski, the firm's communications manager.
Chris Cooper is working at Market.al in his first full-time job in graphic design since he graduated from college 18 months ago. After interviewing with 12 companies, the deciding factor came down to the value he places on learning.
"The one thing that really stood out was that they were willing to teach and grow with me," Cooper says.
As the new kid, he says the atmosphere of equality allows him to share ideas with co-workers as well as with the partners. The value of that to the company is tangible.
For Cooper, that fostering of creative ideas is an intangible perk that keeps him from looking for his next promotion elsewhere. For smaller firms such as Market.al, knowing what motivates employees is the start of a successful retention program.
The reason Mathew Maserati stays with Market.al is the same reason that has him in the office early and staying late.
"I have a passion for what I do, and it's rewarded here," he says.
The self-taught systems specialist bypassed another well-known company four years ago because Market.al recognized his need to be creative and actively contribute.
"It's not that they're hearing you ... they're listening," Maserati explains.
And for many younger workers, that is a distinct difference.
Fostering employees' sense of ownership also develops their sense of self-worth. Businesses that recognize the relationship between productive employees and productivity have nowhere to go but up as the labor market continues to tighten and the search for qualified workers becomes more difficult.
Cross-train your team
When Grzybowski asked to help in the client side of the business, the opportunity was there.
"We're not classified into one set of tasks," she says.
Her previous involvement with customers had always been after a project had begun. She says the experience of initiating the sale adds a valuable asset to her portfolio of knowledge.
Admitting that money is a motivator, Grzybowski says that having the chance to grow and knowing that your feedback is valued weighs just as heavily. With no plans to leave the company, she says, "As long as the challenge is still there, the spark is still there."
Cross training not only offers growth opportunities for employees, it strengthens a business against staff drain during peak periods, helps in vacation coverage and increases a sense of team building. Key to its success is finding out who wants the challenge and using it as a motivational technique.
For Market.al, as with businesses of any size, finding ways to keep employees from leaving for the competition is a struggle every day. The bottom line is that, these days, the more your company provides employees with, the better off it will be.
And simply throwing money at them is not the answer. How to reach: Market.al, (440) 717-7600; Parker-Hannifin, (216) 896-3000
Deborah Garofalo (firstname.lastname@example.org) is associate editor of SBN Magazine.