Every year, our internal surveys and our turnover reports point to an unexpected trend when it comes to retention: Being nice to people is a competitive advantage.
In one market, we have a client that pays $10.00 an hour for an unskilled labor position. Across town, a similar client pays $12.50 an hour. The low paying client is very nice to the people who work in their facility, even though they have daily goals, and even though the work is consistent (meaning, they are very busy). The higher paying client doesn’t treat their employees the same way at all. Instead, they drop them on the line, yell at them to work faster, and then mostly ignore them. Their supervisors create a culture that creates very high turnover.
The turnover for the client that is nice to their employees is around 14% annually. That’s exceptional for a manufacturer, and even more exceptional for temporary employees. The turnover for the client that is not so nice to their employees is just over 400% annually.
Honestly, as good as we are at calculating the soft costs that come with turnover, we can’t begin to calculate the cost for the client with the higher pay rate and the not-so-great culture. We don’t know how to estimate the reputation damage they are suffering in the marketplace, but we do know that people refuse the job because they’ve heard from their friends that they shouldn’t go to work there. Until now, our clients have mostly been unaware of the fact that word spreads in the community–and faster than one thinks.
You might think that “being nice” sounds like “soft, woo woo stuff.” You might believe that you need tough-as-nails, get things done managers and supervisors to meet your goals and produce results. But as labor markets continue to tighten, as competition continues to grow, and as wages and costs of employing people continue to rise, you are going to find that “being nice” is a strategic initiative. It’s dollars and sense.
When you discover that you need employees at a cost that allows you to profitably run your business more than they need your job, being nice is an initiative that costs you nothing and produces outsized results.
Make no mistake, we have more data to back this up. One of our past clients was described by our employees as a cross between a day care center and a prison. The average employee there turns over in three weeks, requiring 16 employees to be placed each year just to keep one person on a line. Creating a culture that keeps people is a strategic imperative.