What Do Your Competitors Do?
While it’s important to look at your direct business competitors, what you really want to look at here is competitors for your talent. What businesses are your new hires coming from? When people quit, where are they going? People highly value vacation as one of their benefits. If your “competitors” are offering more vacation, or more flexibility, you’re going to find it difficult to attract the best people.
Incentivized Yearly Vacation
This may seem an odd concept—we’ll pay you to take time off!—but it’s increasingly common for startups and tech companies. Why? People are more productive if they take a break once in a while, and investing in down time could prevent burnout, disengagement and turnover.
Separate Sick and Vacation Days or One PTO Bucket?
There are pros and cons to both systems. If you live in a state that has mandatory sick days, then you’ll definitely want separate buckets. But, otherwise, it’s up to you. People who don’t get sick often really enjoy having the ability to use all their days off for fun things, but people who are prone to illness find it frustrating that they can never take a vacation because they’ve used all PTO up for the flu. I come down firmly on the side of separate buckets, precisely because I want people who are sick to stay home and recover, rather than worrying that this illness will use up all their vacation days.
Some businesses—most notably Netflix—have adopted an unlimited vacation day policy. The theory is, as long as you’re getting your work done, you can take whatever time you want. In practice, this requires a high caliber of worker and a higher caliber of manager. How can you be sure everyone is getting things done and receiving the time off that they so desperately need? Some studies show that people with unlimited PTO take fewer vacation days than people who are under a strict limit.
Should Vacation Rollover?
Lots of government jobs allow people to accrue vacation with no limits. So, people do. When they quit they receive a huge vacation payout. This means your books are full of unpaid liabilities, which isn’t good. Additionally, your employees never get the breaks that they need. Instead, limit the amount of time someone can rollover to the next year, and encourage everyone to use their vacation time.
Don’t Be Surprised When Employees Quit
Post written by Jack Altman
I recently wrote a post about the financial cost companies incur from losing talented employees. My hope was to illuminate in concrete terms just how expensive it is to lose good employees. In this post, I’ll discuss how you can keep them.
Fundamentally, it starts with empathy. The employer-employee relationship is just like any other personal relationship; strengthening it requires putting yourself in the other person’s shoes.
Companies need to start by thinking; why would an employee quit? From there they can improve their organization to better retain top talent.
Reason 1: Bad managers ruin everything
“People leave managers, not companies.”
Many of us who spend time thinking about management have heard that phrase.
Of all the reasons people leave companies, having a bad manager tops the list. According to Gallup polls, a full 50% of employees who quit cite their manager as the reason.
People might join a company for the compensation, growth opportunities, or mission, but they frequently leave because they don’t have a good relationship with their manager.
Unsurprisingly, the manager relationship is highly correlated with employee engagement. A good proxy for the strength of the relationship is how comfortable an employee is approaching their manager with any type of question. The responses to this statement has a clear relationship with employee engagement:
And why shouldn’t an employee place substantial value on her relationship with her direct manager?
A good manager will give you the freedom to grow, mentor you to be better at what you do, and make your daily work enjoyable. A bad manager, by contrast, can hold you back professionally, developmentally, and make you unhappy.
Solution: As a company, be obsessed with the quality of your managers
The cost of a bad manager is too high to tolerate. Not only will people quit much more often, but they’ll be much less productive before they do.
Being a good manager isn’t rocket science, but it takes work. And unfortunately, a lot of managers don’t put the same dedication into the craft of people management as they do into the craft of what they consider their “real” work.
Good management takes effort and experience, but it’s really pretty straightforward.
These differences make a huge impact. Looking at just one example of a basic management function, goal setting, shows this. When employees were asked to rate their feelings on the statement “My manager helps me set performance goals”, 69% of employees who said “strongly agree” were considered engaged in their work, compared to 8% said “disagree” or “strongly disagree”. (Source: Gallup poll)
The other basic principles of management are similarly important; these are tried and trued foundations for how people work well together.
So companies, beware: a bad manager is much more detrimental than you think and needs to be correctly as quickly as possible.