Tuesday, November 6, 2007

How to keep your employees happy without extra pay

Work is, well, work. But a few companies understand that in order to get the most out of their staffers and keep them they need to have fun. At least sometimes.


Take Nugget Markets, a 10-store northern California grocer. Turnover is 12% among its 900 full-time employees. That's relatively unheard of in the grocery industry, where average turnover is 8% higher. CEO Eric Stille attributes it to Nugget's culture.

Management shows employees they are valued with dance parties, field trips, unexpected financial giveaways and lots of free food. "We want our team to know how much they're appreciated," says Chris Carpenter, Nugget's COO. "That's the number one thing we want them to understand."

That's not a priority for many employers. But it should be. Many say they're fretting about how expensive it is to advertise, recruit and train new employees, not to mention the toll it takes on morale. They're racking their collective brains over how to attract and keep the best talent. It's become such a key issue because unemployment is low (4%), and the supply of jobs is high. That adds up to lots of options for employees.


Interestingly, throwing money at staffers isn't always the answer. Neither is throwing a party every few months. Having fun at work and creating a cohesive team is just one element. The most successful companies also realise flexibility, values, career development and providing meaningful experiences are also important elements to minimising turnover. The interesting thing is that many of the companies that value having a good time usually incorporate those other elements too.

Nugget Markets, for example, pays its employees for sick days they didn't use. They provide incentives to come into work every day. Combine something like that with the newest addition to Nugget's roster of events a rave held on a Saturday at an auditorium in the University of California, Davis. The idea was to recreate a Las Vegas nightclub complete with a DJ flown in from Sin City, a band and an elaborate light system. The grand total was $150,000 -- money well spent, Stille says. "It's not about the money," says Stille. "It's an investment, and you can't figure out a return on investment on that event, but as long as we're creating a great working environment, it's worth every dime."

Other events held for Nugget Market employees: a trip to Six Flags and white water rafting. (Employees who don't want to go rafting are given a paid day off and the $75 it would cost the company to send them on the trip.)

Aside from the field trips, there's a certain spirit brought out in just about everything they do. For a recent sales presentation, management replicated the Octagon used for the Ultimate Fighting Championship and had salespeople deliver presentations in the ring. "They were in a fighting mentality," says Stille.



The Octagon isn't for everyone. Neither is the Rave or white water rafting. And that's what companies need to keep in mind when hiring new employees: Do their personalities mesh with that of the company? If they don't, they still won't remain in the job. "You have to touch the heart of what is considered fun for the people that work for you," says Tamara Erickson, author of Workforce Crisis. "Companies that are good at retention are engaging people. They hire people who fit in there. The ones that are good at it tend to be a bit odd. They do things that are different."

Many will say the Octagon is evidence of that.

Rackspace, a San Antonio, Texas-based managed hosting company, is a bit kooky too. Their annual version of Oktoberfest, Racktoberfest, features a David Hasselhoff look-a-like contest, German beer (there's a two-drink maximum) and dancing to live German oompa-pa music. Family and friends are invited to join employees. This year nearly 1,000 people attended. It cost between $30,000 and $40,000.

"Throwing money at people will only work for a little while," says Rackspace's CEO Lanham Napier. The nine-year-old firm added 80 new employees per month last year and expects that number to grow to 90 next year. Napier says there's an 11% attrition rate annually.

His system for keeping talented employees is clear. Pick people who fit into the organisation both professionally and personality-wise; form small work teams that have their own authority and if you get a good result you get a bonus. He also allocates a "fun budget" for each team. They've used it for all sorts of activities including tubing, laser tag and videogames.

The next step is to advertise the culture of the company. Use those events as a way to recruit talent. "The best thing to do if you're a company is make it clear what you have to offer," says Erickson. That way, when a candidate receives two job offers, and everything else is equal, they might go to the company that has a culture similar to theirs.

After all, bosses want employees to look forward to coming to work every day

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