How to Keep Your Best Employees

Employee retention in Hawaii is much more difficult than it is on the mainland. We spoke to 5 local companies on retention, here’s what they had to say.

Below is an excerpt from ProService Hawaii’s latest ebook “Employee Retention in Hawaii: Strategies and Insights for Small Businesses”. We spoke with 5 local employers who have implemented innovative, successful employee retention programs and asked them to share their insights and strategies on how to keep employees engaged, happy, and at your company.

You can download the rest of the ebook here or by following the link at the bottom of the article. We hope these insights give you some new ideas on how to retain your best employees.

Hawaii’s Retention Problem

When an employee leaves his or her job to take a new opportunity, it normally costs the company 20% of that departing employee’s salary to find a replacement.

In Hawaii, where we already have a limited labor pool to start with, low unemployment, the high cost of living, and the pull of the mainland, make keeping staff on board a real challenge.

Furthermore, societal norms are shifting. While employers used to be able to count on fresh recruits for the entirety of a forty-year career, recent trends point to more “churning and burning” than in years past. Millennials, the generation of young employees who are vital to a business’ long term success, are more likely to hop from job to job than previous generations.

Mark Babin, MMi Realty Services, Inc., President

MMI Realty Services, Inc. is a commercial property management and leasing company that specializes in shopping centers and office buildings. Mark Babin has been with the company since it first opened its doors in 1984, and has worked his way from controller to president.

General Retention Philosophy

Mark’s strongest belief about employee retention is that it happens every day. Fighting to retain employees at the last second is like refusing to throw a punch and then trying to win a boxing match in the final round.

Retaining employees for any serious stretch of time requires continuous, active engagement by management to ensure that employees are satisfied.

Company Culture

“Culture is not a top-down phenomenon. It’s important to listen to the boots on the ground. That’s where it all happens.”

Keeping it Simple

“Early in my career, I wasn’t proactive about employee retention and I lost a really great one, the kind you remember. I tried to fix it, but it was too late. Now, I want to do that ahead of time and avoid the situation altogether.”

Mark emphasizes a simple ideology: “Utilize the Golden Rule. Treat employees at every level like you would want to be treated. It’s crazy how simple that is to do and how well it works.”

Mark avoids the use of any “official” retention programs, preferring instead just to get into the thick of things. “It’s far more informal for us. Here, employee retention happens by walking around and l istening to employees. This works for us and avoids the formality you find other places.”

The informality of Mark’s retention strategies sacrifices certain measurable data, but offers
employees a direct connection with upper management. Spending time around the operation, speaking with those who do the work, and listening to their opinions strengthens the connection between employees and the company.

Finding Employees Who Fit

“People stay when they feel that they’ve found a home. When they feel appreciated, the money’s right, and they’re comfortable. They stay when there’s a fit. When there’s balance.”

It’s Not All About the Money

“We try to minimize turnover and think that respect really helps.” Mark believes that letting employees know what is expected of them, that their work is appreciated, and what their future with the company looks like, shows them respect and lets them know they are valued.

Though a central tenet in his retention philosophy involves proactive engagement, Mark still
understands that not everyone will stay. He strives to retain employees for the length of their tenure, but by the time they’re ready to leave, he is usually ready to let them go.

“If the turnover is the result of dissatisfaction with money, so be it. Money is a short-term motivator. We’re trying to be proactive in providing a satisfying work experience.”

“I think you have an obligation to the company and to your team to try and keep employees, but not exclusively at their exit interview. If we can talk with them and we learn that we’re overlooking something – for instance, they don’t know where they’re going here or their role is undefined – we’ll work to make that right. But I’m not comfortable making a counter offer based exclusively on pay. I’ll address other issues – like support and career path – but I’m not laying down more money.

Is a PEO Right For You?

PEO stands for “Professional Employer Organization” and if you’re a small business, a PEO could help you save time, money, and headaches.

THE OLD WAY of running a small business

Traditionally, many small business owners in Hawaii were struggling to keep up with all the paperwork a growing company requires. From payroll and administration to employee health and retirement benefits to workers’ compensation insurance, state and federal compliance issues and even worker training – small business owners were spending countless hours managing their HR needs, which was getting in the way of scaling their companies.

THE NEW WAY of managing a successful small business

Now, many small businesses in Hawaii rely on a Professional Employer Organization (PEO) to help scale their businesses. PEOs manage HR, benefits, payroll, risk management and all other aspects of employee administration for small, midsize, and large businesses. Because of their large networks, PEOs purchase insurance and benefit plans with significant discounts, enabling small businesses to offer higher-quality healthcare and benefits options that attract and retain skilled employees.

PEOs allow many small to mid-size businesses in Hawaii to focus on growing their business. In fact, small businesses that use PEOs grow 7 to 9 percent faster, have 10 to 14 percent lower employee turnover, and are 50 percent less likely to go out of business. Instead of being bogged down with administrative work, business owners that outsource their HR efforts are able to focus their time, energy, and resources on generating revenue and growth.

PEOs could be the competitive advantage your small business is looking for – Below are three questions you should ask yourself to find out if partnering with one is the right choice for your business.

Are You Spending Too Much Time on Administrative Work?

Administrative tasks such as payroll, taxes, and workplace safety can be challenging and can drain your precious time and company’s resources. Furthermore, compliance errors – innocent or negligent – can create lots of unnecessary work for your organization.

This is where a PEO can step in. By managing the HR tasks that small to medium-sized businesses don’t have the resources or expertise to take care of in-house, a PEO allows you to focus on the big picture. If you find yourself drowning in paperwork, a PEO can help.

Are You Having Trouble Attracting and Retaining Your Best Employees?

As hiring and keeping talented employees becomes increasingly more difficult, many successful companies in Hawaii are strategically leveraging employee benefits as a recruitment and retention tool. By partnering with a PEO, small companies gain access to many resources typically found only at large companies, such as experienced and certified HR professionals to assist with:

  • Compliance issues
  • Health care plan selection
  • Workers’ compensation claims
  • Certified payroll and employment tax
  • HR and safety compliance training

Another area that HR experts can help with is making positive shifts in company culture in order to keep employees happy.

“It’s important to always be aware of what’s going on, culturally, in your organization and also when you can benefit from changing. Places, people, things all change. If you’re stagnant, people won’t want to work there anymore.” – Dennis Brown, President of the Hawaii Chapter of Big Brothers Big Sisters

When an employee leaves, it costs your company 20% of their salary to replace them. That’s a cost many Hawaii businesses cannot afford. If your employee turnover is higher than you’d like, a PEO can help keep your best people around.

Are Your HR Needs Getting in the Way of Scaling Your Company?

Owning a business is tough; owning a business in Hawaii is tougher. You went into business to provide a product or service – to pursue your passion. As your business grows, so do the responsibilities and commitments that take you away from that focus. With complex employment and labor laws that are always changing, the federal Affordable Care Act and state PrePaid Healthcare Act, as well as our reliance on importing and exporting – your time and energy is better spent on strategic business pursuits than trying to keep up with regulations. A PEO can alleviate the pressure of HR tasks and help you get back to what you love doing.

Finding the Right PEO for your Business in Hawaii

If you find yourself nodding along with any of the above scenarios, outsourcing your HR department might be the best strategic move for your growing business. When it comes to hiring a PEO, it is extremely important to do your due diligence. We’ve pulled together the 10 most important questions to ask in selecting a partner for your HR needs. The PEO will be an extension of your company; you should treat the process as if you were hiring an executive for your company.

And we can help you get started. Contact us for a free consultation to determine if our team of experts can help your business grow. At the end of the day, small businesses that choose to partner with a local PEO find it is worth the time, cost savings, and most importantly, peace of mind.