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Accelerating staff turnover rates pose a challenge to employers across the economy. MLA Companies urge those running small to medium-sized businesses to factor employee retention into their overall business plans. This turnover rate means business owners must focus their attention on an employee retention strategy.
MLA provides finance, strategy, and solutions that take into account the needs of employee retention. From payroll and tax service to compensation plans for key employees, MLA can serve as your trusted advisor.
In 2018, 41.4 million U.S. workers voluntarily left their jobs, creating a national voluntary employee turnover rate of over 27%. This represented an 8.3% increase over 2017 and a staggering 88% increase over 2010. By 2023, an estimated 35% of U.S. employees will leave their jobs each year to go to work somewhere else. “High turnover rates,” says MLA Companies co-founder and CEO Seth Morgan, “can have a negative effect not only on staff morale but on a company’s bottom line. These figures are a clear indication that businesses should make employee retention part of their overall business plan.”
Restaurants have been among the hardest-hit sectors by the pandemic shut-downs, and many are functioning well below their full staffing needs. Barb Kohmescher is a CPA and Senior Business Advisor at MLA. Prior to joining MLA, Barb had 22 years experience in restaurant management and was part owner and financial controller for a premier sports cafe with six locations. “By carefully managing payroll and benefits, we improved employee retention in this high-turnover industry,” Barb says. “Often your best employees are those who are looking for a sense of security in their work, even in low-income, or part-time roles.”
A key to creating this engagement, Morgan notes, is giving employees a sense of ownership. Some of his firm’s clients, for example, offer salaried employees a greater level of profit-sharing in lieu of annual pay increases. Morgan reports that many employees take this option, intensifying their focus on initiatives that may not pay off for several years. “This company faced the decision on how to make cutbacks during COVID,” Morgan states. “The hourly workers agreed to an across-the-board reduction of their hours per week instead of laying off some to keep others fully scheduled.”
This is a high-stress environment for business. Showing your employees that you value them is essential for a healthy and productive workforce. There are many ways to do this well, but a fair and properly-executed compensation plan is an essential start. “A good workforce,” says Morgan, “is an appreciating asset, not just in operational performance, but in long-term enterprise value. You need to make sure—for the employees’ sake, the company’s sake, and even the company’s valuation – that everyone is positioned to make the very best use of that asset.”
MLA can help define the value of your workforce for your company. Contact us to learn more.