How Employees Can Make or Break Your Company: Finding and Keeping the Right Team for Your Cannabis BusinessJenny Germano, at ICS Consulting, discusses the high cost of employee turnover and what cannabis businesses can do to battle the talent drain.
Every industry faces employee turnover, but in the cannabis business, it is a significant challenge. It’s not just a pain in the neck; employee turnover costs your business in a number of ways including:
- Continual costs of advertising and recruitment
- A “money pit” being spent to repeatedly train new employees.
- Frequent turnover can make your business seem unstable.
- Constant new and short-lived employees can damage your reputation with customers; plus, customer care becomes watered down and it weakens ongoing rapport.
- Being consistently short-staffed takes away time from other employees doing their own jobs, creating inefficiencies in processes.
- Endless turnover creates a revolving door culture – more people leaving than staying.
- High employee turnover puts you at a higher risk of running into compliance issues and incurring potential costly fines.
For any business, employee turnover comes at a high cost. In our highly regulated market, it comes with a higher cost than most because carefully trained employees are critical to avoid the risk of your business being cited with violations or even possibly shut down. So what can you do to build and keep a stable team?
Why Employees Leave
Workers leave jobs for all sorts of reasons that have nothing to do with their work environment, for example changing careers, leaving the state, going away to school, etc. There’s really nothing you can do about that. However, there are also many reasons (in fact, the majority) that have everything to do with how the business is run and managed, and how the staff is treated, respected, engaged and empowered as employees. These include:
- Lack of structure – there are no processes in place for employees to follow.
- There is no clear opportunity to grow or move up the ladder. The employees of 2018 do not want a dead-end job that is not going to take them anywhere. Even low-level employees want to see a career path.
- Management is not properly trained in managing low-level employees.
- The management style is all disciplinary action and no appreciation - positive reinforcement is lacking.
- Job roles are not clearly defined; this creates boredom and complacency.
- Pay structure is low and employees are not earning a living wage.
- The company is not incentivizing goals for employees to reach.
- Employee evaluations are absent or inconsistent - the employee never knows where they are in their job performance.
Although owners and managers frequently gripe about how high employee turnover plagues our industry, it does not have to be this way. I know of a number of licensed companies in the cannabis industry that have excellent employee retention and longevity. Lowering turnover is not an unattainable goal; you just have to be willing to find and implement creative solutions to hiring and keeping good employees.
How you move forward in creating a healthy workplace culture for employees to thrive in is a long-term investment over the lifetime of your business. It will require you to evaluate your processes and systems regularly to maintain this culture.
One of the processes you should assess routinely is how you are attracting or finding the right employees for your team. Because a first step in keeping your staff is hiring the right employees, to begin with. It is a vital process for building a strong team of worker bees and a strong foundation to support your business.
Hiring The Right Team For Your Cannabis Business
Here are some guidelines to follow for your hiring practices:
- Look for employees who already have a work history in a regulated environment such as healthcare, manufacturing, pharmaceutical, health, and sanitation, or the restaurant industry.
- Give them specific instructions to follow for the application process. Did they follow the instructions? This will let you know if they are going to be subordinate.
- Did they submit a cover letter with their resume and is it professionally done? This will be an indicator of the quality of the employee.
- Are they providing references? If so, take the time to check them! References will tell you a lot about the type of employee they will be. If none were provided, ask for them.
- Ask the applicant about their goals and plans for the future – this will tell you if they are goal oriented.
- Always do a working interview to see how they interact with employees and your customers.
Remember employees are the gears moving our industry and your business forward in growth. As a business, you need to grease the gears to keep everything operating properly.
Once you have hired your team of employees, the next step toward a stable workforce is to implement processes that help you retain them.
How To Retain Good Employees
- Offer health insurance, 401(k), IRA mutual fund, or an investment in company stock.
- Every quarter have an employee appreciation event such as treating them to lunch or taking the team bowling or to some other fun outing. The point is to choose some type of activity or act that lets them know they are appreciated -- and not just once a year.
- Award employees with performance-based incentives like gift cards, company swag or a bonus and a raise.
- Provide ample training for all levels of employees; educating them on compliance, the business mission, and how important they are, empowers employees.
- Give them team and individual goals to reach . . . and acknowledge their successes.
- Utilize the “sandwich effect” when correcting or reprimanding employees – start with positive feedback, then deliver your negative and then close with a positive.
- Allow employees to give feedback in a safe setting and contribute to new ideas.
- An important element in retaining your workforce is how your employees are managed.
- Ensure that your management team is experienced and the management systems you have in place are strong and consistent.
I recommend a fantastic book for managers or owners. It's called The One-Minute Manager by Kenneth H. Blanchard and Spencer Johnson. I read this book several times as a dispensary manager; it helped me tremendously in how to manage employees professionally
Just adding a few of these steps or creating incentives and goals for your employees will encourage them to feel invested in your business and stay longer.
The fact is, your business might be a stepping stone for your employees. It might help catapult them into their cannabis career, or -- if you can provide an opportunity for growth --they might choose a career with your company long-term. Either way, your business can win when you invest in your employees.
As a workforce culture, we have gotten stuck in a narrative that the customer comes first and is always right. In reality, your employees should come first. When you put your employees first, it trickles down and they will make your customer a priority because they feel invested in.