It’s no secret that many small businesses are experiencing staffing challenges. Not only is the accounting profession experiencing a significant talent gap, but small businesses in general are struggling to attract and retain skilled workers. Consider these facts:
- The number of students sitting for the CPA exam decreased by 33%, with 30% fewer students passing the final section of the CPA exam.
- Roughly 75% of AICPA (American Institute of Certified Public Accountants) members are at retirement age.
- 63% of small businesses cited a lack of qualified candidates in their talent pool.
Keeping that in mind, consider the fact that the unemployment rate in the United States was at 4.1% in June 2024. That’s about 6.8 million people who are unemployed. 31% of companies say they don’t have enough people to fill open positions.
And a study by Resume Builder found that 28% of workers are likely to quit their jobs in 2024, spurring a possible Great Resignation 2.0. So, that begs the question: What is happening?
Chances are, at least part of this is due to company culture. You’d be surprised what a poor culture can cost your business—and it’s not just in terms of employee morale. A killer culture (and we mean this in the positive sense of the word) can save a lot of money. So, let’s talk about how to improve employee retention, shall we?
Our final class on staffing is in session.
Understanding the culture-ROI connection
Did you know that investing in a strong workplace culture can yield significant returns? This is often referred to as the culture-ROI connection. While it isn’t something easily quantifiable (don’t worry, we’ll cover some ways you can measure it), the impact on improving employee retention is undeniable.
Companies with a strong culture have been shown to attract and retain top talent. How? By creating a culture that:
- Improves employee engagement
- Boosts productivity
- Increases customer satisfaction
Consider this statistic: 56% of employees rank good workplace culture as more important than salary. Now, hold the phone. Some of you may think, “If we have a good culture, we can pay less.” Not so fast. A competitive (and livable) salary is essential, too. But I digress.
Creating and nurturing an incredible culture is imperative if you want to retain your employees. Especially when 47% of job seekers cite company culture as the driving reason to look for a new job. So…how can you evaluate your culture’s impact on your business?
Here are several ways to measure culture ROI:
- Employment engagement surveys. Conduct weekly (or regular) surveys to assess how connected your employees feel to their work, their coworkers and your company’s mission. Engaged employees are typically more productive, innovative and loyal, which contributes to the success of your business. Companies with high employee engagement experience a 23% increase in profitability, too.
- Turnover rates. Another way to measure culture ROI is to track employee turnover rates. High turnover is costly—it can range from one-half to two times an employee’s annual salary. A strong company culture is a significant factor in improving employee retention.
- Customer satisfaction scores. There’s a strong link between employee engagement and customer satisfaction. When employees feel engaged and supported by a healthy culture, they’re more likely to deliver better customer service.
- Employee Net Promoter Score (eNPS). The eNPS measures how likely employees are to recommend their place of employment to others. And this provides a snapshot of overall employee satisfaction and loyalty. A higher eNPS is often correlated with lower turnover and higher productivity.
- Absenteeism rates. Culture has a big impact on absenteeism, which is yet another indicator of ROI. Employees who feel engaged with their workplace are less likely to take unplanned time off.
Are you ‘quiet firing’ your employees?
Is it you? As a leader, are you the [unintentional] problem? You may be surprised to learn that you’re quietly firing your employees without even knowing it. However, some leaders deliberately establish an environment that’s unwelcoming or lacking in support, with the intention of getting an employee to quit voluntarily. Here are seven signs you may be quietly firing your employees.
- You avoid communication. If you find yourself actively avoiding meetings or conversations with a specific employee, you may be inadvertently pushing them away.
- You withhold opportunities. Maybe you consistently don’t offer certain employees the same growth opportunities as you do others. You may want to ask yourself why.
- You intentionally exclude others. If you’re regularly leaving out an employee from important projects or meetings where their contribution would be valued or necessary, you may be quietly firing them.
- You ignore contributions. Neglecting to recognize or acknowledge a staff member’s achievements or contributions—especially if you consistently recognize others—may lead them to leave.
- You fail to address concerns. If an employee is candid with you and makes you aware of concerns or asks for feedback, but you ignore or minimize them…it can make them feel like you’re intentionally pushing them away.
- You set unrealistic expectations. Insisting upon unreasonably high or unattainable expectations that result in failure can be considered quiet firing.
- You provide minimal support. If you fail to provide the support and resources your team needs to succeed, it can give the impression that you don’t want them to succeed.
Recognizing signs of quiet firing in your own behavior is the first step to creating a more inclusive work environment and can help improve employee retention.
Are your employees ‘quiet quitting’?
Did you know that one in three full-time employees say they’re actively quiet quitting in 2024? That’s a startling statistic, to say the least. But if you have a culture problem, it may not be very surprising. If you’re a leader, here are the signs to watch out for. And if you’re an employee, you’re at risk of being outed…sorry about that.
1. Reduced engagement.
Employees who once showed enthusiasm, contributed in meetings or volunteered for new projects are now quiet and less communicative, which may be a sign of disengagement.
2. Doing the bare minimum.
Quiet quitters tend to do the basic requirements of their position; they no longer go above and beyond. They also may become very strict about their work hours. (Of course, it could also mean they’re setting healthy work boundaries, but po-ta-to, po-tah-to.)
3. Decline in productivity.
There’s a clear drop in quality of work, like making more mistakes than usual or missing deadlines. And if an employee starts working at a slower pace with the same workload, it could indicate a lack of motivation and engagement.
4. Increased absenteeism.
An employee may be disengaging when they begin taking more sick days, arriving late or leaving early, requesting last-minute PTO or taking off in the middle of the day with no explanation.
5. Increased negativity or apathy.
If you notice a shift toward a negative attitude, including cynicism or pessimism about the company’s direction or management, it could mean they’re mentally checking out. And if they no longer care about their role in your business’s success, they’re probably disengaging.
If you observe these signs, it’s important to be proactive and address the issue right away. Quiet quitting is often a symptom of deeper issues, such as burnout, dissatisfaction with leadership, lack of recognition and poor work-life balance. Engage in open, non-judgmental conversations with your employees to help uncover the root cause and try to reengage them before they make the decision to leave.
How can you identify a culture problem?
It’s important to be able to spot a culture problem within your company to ensure a healthy and productive work environment. A toxic culture leads to high turnover, low morale and decreased productivity. Here are five ways to help you identify if your culture is contributing to these issues:
1. High turnover.
This one may be the most obvious. If you notice that employees are leaving frequently (and quickly), it could be because they’re unhappy with their work environment, leadership or company values. If you conduct exit interviews (and you should, by the way), you’ll learn valuable insights into why employees are leaving.
2. Low employee engagement and morale.
Engagement is a direct reflection of your culture. And if you have low engagement, chances are your employees feel disconnected, undervalued or unsupported. Conduct regular employee engagement surveys to gauge how connected and motivated your team feels, and then take steps to improve the situation.
3. Increased absenteeism or presenteeism.
If employees are frequently absent at the last minute, it can be a red flag. On the flip side, presenteeism—where employees come to work despite feeling unwell or disengaged—can also indicate problems because they feel pressured to be present, no matter their current physical or mental state.
4. Negative feedback in employee reviews and surveys.
Employee reviews and feedback are invaluable for identifying issues with your culture. If you’re seeing consistent negative feedback across several departments or roles, you’ll be able to see where your company may be failing to support employee well-being or performance.
5. Toxic behavior and workplace conflict.
A culture problem can manifest in the form of toxic behavior like bullying, harassment or frequent employee conflicts. If your business lacks effective conflict resolution or unsavory behavior goes unchecked, your culture is likely unhealthy.
Regularly monitor your team via one-on-one meetings and surveys to help identify any issues that arise. Doing this allows you to swiftly correct any culture problems, and it shows your team that you have their best interests at heart (along with that of your business). Creating a healthy, supportive and engaging workplace is essential not only for the long-term success of your business, but for improving employee retention, too.
5 strategies to improve employee retention
If you read through those signs and your palms got sweaty, eyes got big or you felt your heart drop into your stomach, you’re not alone. Harboring an unhealthy culture and a revolving door of staff doesn’t feel good for anyone. But there’s good news—you can turn that around! Here are five strategies to help you improve employee retention:
- Foster a positive workplace culture. Create an environment where your employees feel valued, heard and respected. Encourage employee engagement, promote work-life balance and mental wellness, and offer professional development opportunities.
- Enhance communication. Open and transparent communication builds trust. Check in with your team regularly, encourage candid feedback without repercussions and address any concerns right away.
- Offer flexibility. We’re in a world of remote and hybrid work; it’s just the norm now. And schedule flexibility is increasingly important to employees. Offering these options can make your company more attractive to current and prospective team members.
- Recognize and reward employees. Showing your appreciation can go a long way for your team. Be sure to publicly acknowledge their hard work and contributions. Hey, sending a handwritten thank-you note in the digital age? Bonus points, for sure. Make this part of your surveys too. Ask your team how they like to be recognized and rewarded.
- Invest in professional development. Show your team that you’re invested in their futures by providing opportunities for growth and development. This can be key in retaining top talent. And then, make sure they have time to dedicate to this area, too.
Take steps today to improve employee retention
As much as I would love to school you on how to create an incredible culture, we’ve given you those lessons several times on the blog—just click here. What I do want you to walk away with is the knowledge that you have the ability to address culture and retention.
Your culture isn’t just about keeping your current staff…it’s about building a workplace where employees want to stay, grow and thrive. And you can absolutely do this. By taking proactive steps to improve your culture, you can prevent quiet firing, quiet quitting, reduce turnover and improve employee retention—all while enhancing your business’s performance.
Remember, change starts with you. So, take that first step today. Your future self (and your team) will thank you.
That is all. Class is dismissed.
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