Keeping hold of your salon staff makes financial sense

Every time a valued employee leaves a large portion of your bottom line goes with them, never to be seen again. Using 'velvet handcuffs' you can make your salon so attractive that these valuable assets don't want to leave.

f someone leaves you it's not just a case of having to go back through an increasingly difficult and time-consuming search and recruitment process. The financial costs vary, but can be as high as one or two times the defector's annual salary. And that's just the financial cost - look at the many impacts on other areas like morale, productivity, client confidence and so on, and you'll see that the real cost is much higher especially as clients often follow stylists elsewhere. One US financial institution estimates that for every 10 managerial employees that defect, it loses $1m in revenue!

When employees begin to consider changing jobs they weigh the benefits of staying put, versus the benefits of moving on. Every employee's job-delivered value is different - a complex mix of money, perks, work environment, company culture, attitudes, career development, employee relations and quality of life. Your challenge is to create a situation where every employee can get a balance of these factors that convinces them that there is more value to remaining with your organisation than moving to another. 

Retention begins at the front door - when you hire. You will only retain (or want to retain) employees when there is a good fit between those employees, the requirements of their jobs, and your salon's culture. If there's no fit they simply won't work out - they'll either become a liability to your team or they'll leave. Either way they'll cost you money. Smart companies don't hire out of desperation - they hire only those employees they can retain. Be sure that you use a hiring process that allows you to fit employees into your positions - use the approach of  'hiring smart'.

Once you have the right people you'll now want to use all approaches that you can to retain them. One key point: if different people value different things then you're going to have to provide a grab-bag of added value that will allow you to tailor the value delivered to any given employee such that it outweighs what they might gain by moving on. Using 'velvet handcuffs' means locking your people in with whatever positive benefits you can deliver to them as an employee. The following are the sort of initiatives you should consider:

It may well still be a way of getting attention in the job market, but it's not enough to assure retention. A study by US firm Positive Directions found that money wasn't really a determining factor to most people. However, money is always an issue - your salaries must be competitive and fair for the skills your employees possess. While lots of money won't necessarily retain potential defectors, a lack of it will help their decisions to defect.

Research shows that long-term employee loyalty is dramatically improved when they are properly inducted into the company. All successful organisations provide formal employee orientation sessions lasting from a few hours to a few weeks. In these sessions the employee is introduced to the company, its philosophies and procedures, and is made to feel part of the team from the outset. With a little imagination induction sessions are practical for jobs at any level.

All employees want to feel like they are part of a winning team, and that there is an opportunity for them to advance within the company. If that is a possibility then work with them to create career development plans. If that opportunity simply doesn't exist then it's particularly important to provide alternative opportunities for employees to advance themselves and their skills through on-going training. According to Richard Marsh of Dale Carnegie Training, "companies are now providing personal development and training programmes as value-added perks to employees, not simply as aids to development of specific job-related abilities". This could be something as simple as group learning of new styles or collectively going to shows.

There is much talk just now of the difficulty of finding childcare in an era when it is increasingly essential that both partners in a relationship bring in a salary. A little flexibility can often be a significant value-add for people in this situation. Look for opportunities to provide flexi-hours, job sharing and even more holiday time. Managed properly this can be a relatively inexpensive but highly valued perk.

Share the goals and progress of the salon with the employees

Involve them in your dream. Ensure that they know what you are trying to achieve, why, against what competition, and what part they are expected to play in your plans. Then regularly update them on how things are going - good or bad. People need to know how their future is progressing - and if you do things right then you're their future.

This is another factor that costs little, but has a disproportionately high value to many employees. Mary Kay Ash, the founder of Mary Kay Cosmetics said: "There are two things people want more than sex and money: recognition and praise." Provide formal and informal praise. Consider Employee of the Month-type schemes that give you an opportunity to give every employee their deserved 15 minutes of fame. Also, ensure that your managers are actively looking for opportunities to praise employees for a job well done - frequent one-minute praising makes a remarkable difference to employee morale. Reward positive comments from clients.

Make your organisation one where your people happily manacle themselves to your future. 

Lock in your key assets - your people.