Jenell Nukolczak, CTC
Just as you begin to bask in the glory of owning and/or managing your very own travel agency, reality moves in like a raincloud. Although you now have complete control over your career, and are no longer subject to someone else’s vision, you suddenly realize that your livelihood depends on your ability to hire and retain good employees. For some this whole new set of tasks can be daunting.
Longevity of employees is the goal for most employers as this keeps the business running smoothly and can result in saving money. Turnover costs are much higher than many employers anticipate. In a working paper published by the Institute for Research on Labor and Employment UC Berkeley, the average replacement costs for all workers in the workplace range from $3,000 to $4,500i with Blue Collar workers’ costs significantly lower and Professional and Managerial workers’ costs significantly higher. To calculate average replacement costs for your agency, first estimate your direct costs of turnover. Direct costs may consist of payout of vacation pay, sick pay, or severance pay; unemployment compensation payments; recruitment costs such as advertising, employment agencies, etc.; interviews, background checks, and/or reference checks; bonuses; and training. Then estimate your indirect costs of turnover such as lower productivity due to staff shortage, errors relating to inexperience, client loss due to frustration dealing with multiple agents, and/or loss of other employees due to frustration and stress from turnover. Once you add the cost of direct and indirect costs of turnover, divide that number by the total number of employees that have left the agency and you have your agency’s average turnover costs.
When using the 5 keys to achieving success in retaining employees, you will reduce turnover costs for your agency and foster a positive work environment.
Key 1: Always Research Potential Employees Beyond Job Skills Alone
A little bit of research in the beginning of the employment process could reduce turnover expenses for your agency. It may be hard to believe, but some agencies do not dig deep to determine whether or not a potential employee will be a good investment. Typically employers focus on researching a potential employee’s job skills and training, but do not extend that focus and research beyond skill and knowledge. Even before you interview a potential employee,dig deeper into what the candidate’s resume is saying. For example, did the candidate previously work with a large agency or a small agency? Are any of the prior agencies well-known, and if so, why? How long did the candidate stay with each previous agency? Are there gaps in employment? Does the candidate belong to any travel organizations and/or have any formal travel industry training? Making snap judgments based on what you find at this stage can be just as detrimental as not considering these factors as there may be extenuating circumstances in certain situations, and that information is best obtained during the interview. Answers to the questions based on a potential employee’s resume can help you in developing questions to ask during the interview process, thereby aiding in discovering whether or not this candidate is a good fit for your agency.
Your research will assist in guiding the direction of the interview, as well as provide recommendations for information to ascertain once you and the potential employee meet for an interview. When asking questions during the interview process, direct your attention more toward how this candidate’s personality and experience will mesh with your agency’s mission statement and overall vision rather than just confirmation that he or she indeed has the skills printed on his or her resume. Why is the candidate looking to change positions? Why did the candidate leave his or her last employer? What did he or she like best and least? Why did he or she become a travel agent? What does the candidate feel is the most important part of his or her job? Try to elicit responses that will give insight into the candidate’s personality and character, and benefit you in completing your research.
Key 2: Make Sure Your Expectations are Clear
According to research by the Society for Human Resource Management, 95% of workers consider communication between employees and senior management as important with 55% considering it very important.ii Each agency owner and/or manager has expectations on how employees will work toward achieving the agency’s mission. Inherent to those goals are expectations for each employee. Unfortunately, sometimes there is a disconnect between what the owner or manager expects of employees and what is actually communicated to the employees.
Some agencies have an employee handbook which outlines job performance expectations as well as consequences for not meeting those expectations. While having an employee handbook is a great start, it is not enough on its own. There is a tendency either to have very broad language in handbooks which leads to a myriad of interpretations of expectations thereby defeating the purpose of said handbook, or to have very detailed language and/or instructions thereby being so complex as to confuse employees as to what is expected of them.
Instead of just relying on an employee handbook, one way to reinforce expectations is to ensure that proper training is provided. Training can take time, but just think of how productive a properly trained employee will be thus saving time in the future. Another way to reinforce expectations is to publicly acknowledge employees meeting those expectations. This positive reinforcement will encourage others to meet the same expectations so that they too can be acknowledged for their work, as well as clarify expectations for anyone in doubt. Most importantly, however, owners and managers need to be approachable so that if clarification is necessary, there is no hesitation on the part of the employee in seeking that clarification.
Key 3: Facilitate Effective Communication and Put Yourself in Their Shoes
As seen above, nothing frustrates both employees and employers more than misunderstandings on the job. Doling out assignments, instructions, and expectations are the normal course of business for owners and managers. Many decisions regarding the normal course of business are made without the input of workers. Although these decisions usually involve research, cost analysis and planning, typically the workers are not involved in any of these processes. For employees this can be quite challenging as they are the ones actually implementing the plans for the agency without a true understanding of why they are expected to perform their duties in a certain manner, as well as the significance and/or importance.
There is a television show on CBS called Undercover Boss that provides an opportunity for employers to go undercover in their businesses and explore operations in their companies. Employers are able to get the perspective of their employees by putting themselves in their shoes. Often employers find out that there is little to no communication of the company’s goals and/or expectations to the employees. On the show there also seems to be a trend of employees having to perform their jobs in ineffective ways, and although the employees have great ideas and/or solutions on how to perform their jobs more effectively, they are stuck in a position where they cannot convey those ideas to owners and/or managers. Many of these employees when questioned are either actively seeking other employment or considering leaving their current position.
Creating an environment wherein employers actively seek input from employees, and employees know they can express their opinions and ideas is optimal for retaining employees. This fosters an atmosphere of communication and demonstrates to employees that they are valuable. One of the most difficult tasks may be to get employees to open up in meetings; however, Joseph Grenny, coauthor of the book Crucial Conversations and cofounder of VitalSmarts, opines that “coming up with a code word that jars people into knowing they can be candid with you” and using the phrase “crucial conversation” will “frame the issue so that your team knows they have permission to be honest and open.”iii Whether you are encouraging feedback in an agency meeting, approaching individual employees one by one, or keeping your door open for employees to approach you, getting the perspective of employees is not only invaluable to your agency, but crucial in retaining those employees.
Key 4: Speak Their Appreciation Language
Research conducted by the Society for Human Resource Management shows that 94% of employees feel that Management’s recognition of employee job performance is important.iv This is a significant percentage especially considering only 62% of employees feel satisfied with Management’s recognition of employee job performancev. According to Dr. Gary Chapman and Dr. Paul White, authors of the book The 5 Languages of Appreciation in the Workplace, communicating appreciation to workers in a way they understand and/or feel appreciated will reduce turnover and facilitate a more positive work environment. Communicating with a worker in his or her “primary language of appreciation” will increase workplace satisfaction thereby decreasing the likelihood of turnover. The authors classify the “languages of appreciation” into 5 categories: Words of Affirmation; Quality Time; Acts of Service; Tangible Gifts; and Physical Touch.vi While most of these “languages of appreciation” are self-explanatory to a certain extent and may even be commonplace in many businesses, physical touch may seem an inappropriate inclusion. The extent of physical touch referred to by the authors includes touch appropriate for the workplace such as a handshake, high five, or pat on the back.
To speak an employee’s appreciation language will require you to develop an understanding of said employee. This does not mean you need to become “buddy-buddy” with your employees and blur the leadership lines; however, it does require that you be genuine with your employees, pay attention to their body language (not just what they say), and listen intently to what they say. This task is easier for smaller agencies, but is essential no matter the size of your agency. Dr. White has a website (appreciationatwork.com) with tools and resources to help in the workplace no matter the size of your agency, and offers training for businesses interested in implementing a program focusing on appreciation languages in the workplace.
While focusing on each employee’s appreciation language can definitely stimulate a positive and productive work environment, incorporating a combination of techniques for all the appreciation languages can increase your effectiveness as an owner/manager. For example, giving heartfelt praise (even in front of others) for accomplishments achieved by employees; taking time to focus on conversations with others including maintaining eye contact and ignoring distractions such as your phone; offering to pitch in on big projects or offering to advise on said projects (and following through); offering gifts that are meaningful and would be valued by your employees (not necessarily of great monetary value); and greeting employees by shaking their hands as opposed to just a verbal greeting or nod. Keep in mind that the attitude conveyed when showing appreciation will set the tone for how the employee receives and/or perceives your demonstration of appreciation.
Key 5: Don’t Rule Out Increasing Compensation
The cost of running any business, including a travel agency, can be very expensive. Overhead costs may include licensing, certifications, sellers of travel, errors and omissions insurance, GDS fees, CRM fees, building lease, utilities, cleaning service, workers’ compensation insurance, postage, marketing, office supplies, as well as some the largest expenses – payroll, payroll taxes, and benefits. It can be tempting to hold onto the position that salary increases are not fiscally possible. In fact, letting an employee leave the agency because he or she is dissatisfied with his or her compensation and hiring another employee at a lower salary may seem like the best fiscal option. It is interesting to note that the research from Society for Human Resource Management found that 61% of employees consider overall compensation/pay to be very important, but only 24% are very satisfied.vii Taking this into consideration, owners and managers need to evaluate the compensation situation in a different light.
First, the owner or manager needs to look at how many times the agency experiences turnover annually. Second, the owner or manager should multiply that number by the agency’s average turnover cost. This will provide the owner or manager with the annual turnover cost. Next, evaluate what amount of compensation would be necessary to keep the dissatisfied employee at the agency long-term. Compare the additional compensation amount with the average turnover cost, as well as the annual turnover cost (an employee staying long-term would in theory alleviate the need for further turnover costs throughout the year). It may be surprising how much a salary increase is actually more fiscally responsible than starting fresh with a new employee. Keeping in mind also that satisfied employees tend to work harder, present a more positive attitude, and exhibit more loyalty than dissatisfied and/or new employees.
Retaining employees is essential to maintain a thriving business and reducing costs. When owners and managers take an active role in retaining employees by always researching potential employees beyond job skills alone, making sure expectations are clear, facilitating effective communication and putting themselves in the shoes of the employees, speaking the appreciation language of the employees, as well as not ruling out increasing compensation, they can achieve said goals.
Endnotes
(i) Dube, Arindrajit, Freeman, Eric, & Reich, Michael. (2010). Employee Replacement Costs. UC Berkeley: Institute for Research on Labor and Employment. Retrieved from: http:// escholarship.org/uc/item/7kc29981, page 2.
(ii) Society for Human Resource Management. (2015). Employee Job Satisfaction and Engagement: Optimizing Organizational Culture for Success, page 39 and 41
(iii) Knight, Rebecca. (2014). How to Get Your Employees to Speak Up. Retrieved from https://hbr.org/2014/10/how-to-get-your-employees-to-speak-up/, page 2
(iv) Society for Human Resource Management. (2015). Employee Job Satisfaction and Engagement: Optimizing Organizational Culture for Success, page 41
(v) Society for Human Resource Management. (2015). Employee Job Satisfaction and Engagement: Optimizing Organizational Culture for Success, page 30
(vi) Chapman, Gary & White, Paul. (2011, 2012). The 5 Languages of Appreciation in the Workplace. Page 13, 45, 57, 71, 83, 93, 100-101
(vii) Society for Human Resource Management. (2015). Employee Job Satisfaction and Engagement: Optimizing Organizational Culture for Success, page 8
