Turn over cost for a hair stylist

I was recently doing a seminar for small business owners and one of the questions I asked the group: “Do you know your turnover cost?” And everybody looked at me like, “What?” And nobody knew what their turnover cost was. Turnover cost is what it costs you, the business owner, when you lose somebody you didn’t want to lose, and the rule of thumb is one and a half times the person’s salary. At the break, I had a young lady who owned a hair salon come up to me and say, “Jan, help me out with my turnover cost.” She had lost a stylist that she didn’t want to lose, and I asked her how long it was going to take to replace this person, and she said, “30 to 45 days,” and I said, “Well, that’s simple enough. We can calculate the time it takes you to place the ad, interview the people, and get the individual onboarded.”

She says, “Well, that’s not my problem,” and I said, “What’s your problem?” And she says, “The vast majority of women who had that lady as a stylist followed her to wherever she went to next.”  Apparently, guys, women tend to follow their stylist wherever she goes. So now I have a different question I have to ask, and that question is, “How long is it going to take this new person coming in the door to get to a break-even of the person who left?” And the answer: two years.

This is what happens in your world all the time. Do you know how long it’s going to take somebody who is replacing the person who that you didn’t want to lose, to get back to the point of break even? And it is a longer time than you think, and you are bleeding money because you have less productivity during this time frame.
And so one of the things that I preach is for you to understand is it’s better for you to keep good employees than to find a new employee, and so developing a culture and a leadership style that helps people want to come to work for you, do quality work, and not leave, is paramount in today’s world.

Having engaged employees who want to come to work and do quality work is paramount to your viability as a business owner or manager. Less than 50% of all new business will be around in 5 years and one of the main reasons is the workforce management practices that are out of touch in today’s workplace. Many businesses today manage people the same way as they did post 2nd World War. Command and Control. That style didn’t work well for the past 70 years and it certainly doesn’t work today. Millennials won’t stay with your business and one of the 7 main reasons they leave is they want a coach and not a boss. You say I can’t keep younger workers I say well whose problem is that. They can leave you and go down the street because their earning expectations are inline with the market.   


3 Leadership Rules That Separate the ‘Good’ From the ‘Best’

Right out of the book It’s The Manager

Do you ever wonder why success is seemingly effortless for some business leaders?

It’s especially perplexing considering the challenges posed by the future of work (which is here, by the way).

Yet for leaders with the right rulebook, building a best-in-class workplace is as simple as 1-2-3. Their thriving organizations have over 70% of their workers ready to outperform the competition.

What’s their secret? Leaders who tackle the excessive demands of today’s workplace do so by following best practices that stand up to decades of rigorous scientific scrutiny.

These leaders live and breathe their playbook of precepts because they know that their leadership approach will determine whether their organization simply survives or slaughters the competition.

Abide by these three rules to start emulating crème-de-la-crème leaders.

1. Treat your workplace culture like a powerful, competitive differentiator.

By now, most business leaders know that culture matters. They might use basic culture survey tools or offer perks designed to create a fun atmosphere.

Still, only 27% of employees strongly believe in their company’s values, according to Gallup data.

Exemplary leaders view their culture as a baseline requirement and ongoing priority — not a “one-and-done” initiative. They use analytics to determine what makes their culture unique and how to make it stronger.

Further, they ensure their culture comes to life — every single day — in their employee experience. This requires consistent metrics and leadership commitment.

Ultimately, leaders who are culture champions help their company consistently win — for instance, by attracting the top 20% of candidates.

2. Don’t simply measure employee engagement; create a culture of high performance by focusing on development.

Many leaders have given employee engagement surveys a try. So why are only 15% of global employees engaged at work?

One underlying problem is that many leaders view employee engagement as the goal — an end in itself.

Excellent leaders recognize that engagement data are only the beginning. They consider engagement an ongoing, methodical exercise — one component of a holistic strategy for optimizing their culture.

The best leaders don’t collect data for data’s sake. They ask questions like, “What pressing problems do I need to address? What challenges are my customers facing?”

To this end, winning leaders enable their managers (who make or break engagement) to serve as coaches who use engagement insights to develop their team members for the future.

Great leaders also know that engagement surveys are a dime a dozen. They take the time to find scientifically and experientially validated approaches to engagement — interventions that are empirically connected to performance gains.

It’s an investment that pays off (and then some). With extraordinary engagement, organizations achieve top-shelf performance in crucial outcomes such as profitability, turnover and sales.

3. Become a data-driven decision-maker.

In today’s marketplace, simply having data isn’t enough. You need cutting-edge analytics to glean breakthroughs and discoveries from your data.

So it’s troubling that 85% of executives say they don’t know how to analyze the data they’ve collected, according to one KPMG study.

The best leaders don’t collect data for data’s sake. They ask questions like, “What pressing problems do I need to address? What challenges are my customers facing?”

That is, smart leaders are hypothesis-driven: They pinpoint their goals and run targeted analyses that address specific problems and objectives. With those insights, they recalibrate their vision and make razor-sharp decisions — in everything from succession planning to performance development.

As a result, their companies boast enviable agility. Data-driven leaders fuel outcomes with every action they take because they are empowered with predictive, forward-looking insights.

There is no magic wand for business excellence. Leaders must demonstrate persistence and courage. The courage to take risks. The courage to admit when you don’t have all the answers.

It’s a tall order, but leaders who are willing to go out on a limb will find that it’s worth it.

How a Focus on People’s Strengths Increases Their Work Engagement

Two wrongs don’t make a right, but four rights might negate one wrong.

When companies achieve a 4-1 engagement ratio — four engaged employees for every one disengaged employee — they reach a tipping point where engaged employees can more consistently counteract the impact of actively disengaged employees.

Companies need engaged workers because they’re the ones who vastly outperform the disengaged — organizations in the top quartile of engagement have 4x greater earnings-per-share growth, better customer engagement, higher productivity, better retention, fewer accidents and higher profitability than their competitors.

So, achieving that ratio — and then surpassing it — is a way to accomplish organic growth.

And how, exactly, does one go about increasing the ratio of engaged to disengaged employees? It turns out, doing so requires ongoing, intentional employee development.

An extremely effective approach to development is to focus on strengths — strengths refer to an individual’s innate patterns of thought, feeling and behavior. Strengths-based development helps people apply their strengths to increase productivity.

Many research studies allude to strengths-based development’s links to engagement and productivity, but a very comprehensive Gallup study showed that strength-based development leads to:

  • 10% to 19% increased sales
  • 14% to 29% increased profit
  • 3% to 7% higher customer engagement
  • 9% to 15% increase in engaged employees

There’s a connection between strengths and engagement that’s fundamental to the employee experience.

Though strengths-based development can’t replace engagement education or manager conversations, a strengths-based education is a powerful catalyst that managers can use to create an engaging environment for their teams.

When even one person knows and uses CliftonStrengths …

Strengths-based development starts with first understanding what strengths contribute to performance. Every team is the sum of its parts, and different challenges call for specific abilities.

Some teams need conflict resolution, some need to be kept on task, others need to help aligning the work with the organizations’ purpose. The people with the talent for the distinct job aspects have an intrinsic ability to do them and, when coached, do them with excellence.

When employees are explicitly encouraged to use their talent in pursuit of a goal, individual engagement improves (from 9% to 15%) as does team performance and the company’s business metrics as well.

Indeed, Gallup studies have found 8% to 18% performance improvement and 2% to 10% increases in customer engagement among strengths-based organizations. Companies like those leave the desired 4-1 ratio in the dust. Their ratios are closer to 8-1. Even 11-1 or higher.

Organizations benefit when even one person — or one team — knows and uses CliftonStrengths, but Gallup research has shown that the benefits significantly increase when organization-wide strengths interventions (including education and coaching) are deployed. These benefits include the aforementioned marked gains in sales, customer metrics and profit, and significant reductions in employee attrition.

To reach the 4-1 ratio and then surpass it, leaders should:

  • Use an employee engagement approach that is simple, clear and involves employees. The measurement needs to be about things they can control day-to-day.
  • Make sure employees can be specific about what they do best and what makes them unique. Increase their self-awareness about their unique strengths and how they can apply them.
  • Build manager competence for coaching, specifically coaching employees around what their strengths are and how to leverage them for success.
  • Change and complexity demands more and better conversations. Make such conversations — particularly coaching conversations — an expectation in the workplace among peers and partners and among leaders, managers and employees. Hold people accountable.

Clearly, getting the optimal engagement ratio is not effortless. And the truth is, to succeed in this effort managers can’t ever stop trying. Engagement is never complete — it’s made fresh every day.

But managers who engineer the employee experience around strengths find it much easier. One Gallup study found a 60-to-1engaged employee-to-disengaged employee ratio with managers who focused on strengths, and a 2-to-1 ration of engaged to actively disengaged employees when managers focused on weaknesses.

Where managers ignored both strengths and weaknesses, employees showed a 1-to-20 ratio of engaged employees to actively disengaged employees.

While a strengths focus won’t replace the importance of having ongoing coaching conversations, it does give managers a leg up on engagement. It amplifies the “I care about you” message that is implicit to an engaging management style. And it directs performance toward excellence.

People want to feel they’re performing with excellence. And managers who focus on strengths create the conditions that allow people to do so — and contribute to high-performing cultures, too, the objective of the world’s best-led companies.

For those managers, the 4-1 ratio was just the first sign they were on the right track. Whether or not they meant to — though talented managers always mean to — they created an extraordinary employee experience along the way.