4 Reasons Why Your Top Employees Are Leaving You!

As a SME business owner in Singapore or Malaysia, you would have realize how challenging it is to hire top talent. In these 2 countries, you will come across an unusual phenomenal. There is a high number of MNCs (multi-national companies) operating in these 2 countries, compared to other parts of Asia. (Aside from Hong Kong)

From an employee standpoint, this is a good thing since it represents more job and career development opportunities. Yet for a SME business owner, this means that they will face intense (and often lop-sided) competition when hiring good talent.

So, what’s the most important thing that needs to happen when they successfully hire a good talent?

Answer: RETENTION

The problems faced by SME business owners tend to be myriad. From figuring out how to acquire more customers, penetrating greenfield market, addressing operational hiccups, developing brand equity to improving the P&L. Hence when it comes to a talent joining a SME, these talents need to figure out how to solve critical problems effectively with limited resources in a non-structured environment.

Having a sense of direction in an ambiguous environment while having minimal support is challenging for most people. To perform well, this group of capable employees must often go the extra mile. There is simply no shortcut around it.

Whether it is putting in 60 hours work week, attending extra courses in their spare time, addressing work issues that got nothing to do with them, to helping colleagues with work, or even taking on 3 men jobs. Hence when a capable employee leaves the organization, the impact of their departure can be felt. (Whether from a P&L, morale or operational standpoint)

The question you should ask now is: How do you retain your high performing employees? I believe 80% of the employees leave for the following reasons. By addressing these issues, employers can certainly reduce turnover rate.

Read next article: Top 5 Challenges Face By Small Business in Singapore

1.      Compensation

A capable employee expects to be paid competitively, or at least market rate. As an employer, how do you ensure a competitive pay structure for your staff? Many employers expect loyalty from their employee, but what have they done to inculcate that? If your objective is to sell your business 3 – 5 years from now, you will need capable lieutenants onboard. The cost of living in Singapore and Malaysia is high. If you don’t know how to take care of your capable employees, someone else will.

Hard Truth: If your staff is putting in 50 – 60 hours work week and not being paid competitively, it’s only a matter of time before they jump ship!

2.      Character

When people work together, these gives individuals the opportunity to know each other better. There is a famous Chinese idiom - 路遥知马力，日久见人心. (Lù yáo zhī mǎlì, rì jiǔ jiàn rénxīn) The direct translation for this idiom is: a long journey will reveal the strength of a horse. Whereas only after a long period of time, can you see the qualities of a person's character. This applies to both the employer as well as employees.

Does your words and action align with each other? Does it lead to trust among your existing employees? Or are they only hanging around for the monthly paycheck?

Hard Truth: High employee turnover rate is often a tell-tale sign of dysfunctional leadership. No matter how good you are at wearing your mask, your character will be revealed over time. (In business and in life)

Read next article: 5 Traits of a Successful Entrepreneur

3.      Career Development Opportunities

When an employee decides to work for you, they typically come in with the expectation that this path will open better opportunities for themselves. Of course, during the process, they are expected to deliver results.

That said, for any of your existing staff, is there anything they can look forward to? New portfolio for them to undertake? Or new things for them to learn?

On the other hand, if a staff is found to be unsuitable, perhaps it’s wise to let them go asap.

Pro-tip: Set a clear expectation for your employee and learn to start the hard conversation early. The longer you delay having hard conversation, the more heartaches you are going to have.

4.      Broken social contract

Every employee comes in with a different expectation of what the employer is either going to do for them, or how they would like to be treated. Some of the common expectation can be WFH (work from home arrangement), flexibility to take time off, preference for non-micromanagement style, desire to be treated with respect etc.

There are instances where employee expectations are more subtle and often time, not verbally expressed. The desire for collaboration, organizational stability, performance bonus, capability and morale of the team are important unspoken requirements that need to be uncovered as soon as possible. I believe it’s critical to align everyone’s interest together especially when the team is small.

When an employer breaks the unspoken social contract with their employee, it will cause a crack in the relationship. I believe this will eventually lead to the departure of the employee.

If you are a business owner of a SME, having a stable workforce is crucial. Having capable employees that can go the extra mile for you, allows you to grow the business. But before you expect loyalty from them, perhaps it might be a good idea to ask yourself if you have earned it?

Read next article: Navigating the Paradoxes of Selling Your Business in Singapore

If you are a SME business owner looking to buy or sell business in Singapore/ Malaysia, feel free to contact us for a consultation. Fey Day is a Singapore business broker with operation in Singapore and Malaysia. View our business listings today!