Business Questions

May 16, 2014 5:27 pm

How can I reduce employee turnover?

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Roger Beale©Roger Beale

Our high staff turnover is stunting our growth – employees keep leaving us after only a couple of years. What can we do?

Do not panic. A low degree of staff turnover is not always a good thing. Most businesses rely on some staff turnover to clear out dead wood and to inject fresh blood into the organisation. However, if you are struggling to retain your best staff there are some practical steps you can take to reduce staff turnover, or at least mitigate its effects.

Putting employees on longer notice periods would be a good start. Employees are usually attracted to the protection this offers, and it will also buy you some time to do handovers, train other staff and recruit a replacement. Also, ensuring that key employees are signed up to post-employment restrictions will help limit their ability to compete against you once they have left.

Apart from trying to stop staff leaving, you should also think about incentivising high performers to stay. Bonus schemes can do this, especially where your scheme ensures not only that payouts are made a number of months after they are announced, but also that they are recoverable by you if an employee leaves.

Similarly, a share incentive plan, under which shares in the company are awarded to an employee over a period of time, may tie in your best people and encourage them to stay.

As well as tackling the symptoms of high staff turnover, you might also want to look at the causes. There could be many reasons, from low pay and lack of work/life balance to workplace bullying and overbearing managers. Confidential and anonymous employee engagement surveys are often illuminating. In any event, make sure whenever someone leaves you have an exit interview so you can get some honest feedback.

David Greenhalgh is a partner at Twenty Twenty Law

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Next stop, rail against HS2

I run a small commercial property leasing business in the West Midlands and I am concerned about the proposed route of the high-speed train project (HS2), which, if it goes ahead as planned, will affect some of my properties. I read recently that the government has proposed compensation packages and I wondered how that affects me, as a commercial, rather than residential, property owner? I am concerned that I will at best have to reduce the rent prices significantly of those properties affected and, at worst, have to sell them for dramatically less than they are currently worth. Where do I stand legally in terms of agreements with tenants and what is your general advice on seeking compensation?

On April 9 the government published its proposals in respect of HS2 property compensation for the London to West Midlands route. While the four HS2 property compensation schemes (Express Purchase, Voluntary Purchase, Need to Sell and Rent Back schemes) are welcome news for many owners and occupiers of residential properties, there is very little assistance for businesses and owners and occupiers of commercial properties.

The government has decided that the discretionary compensation measures now announced should focus (almost exclusively) upon assisting residential owner occupiers, rather than owners of business, investment and rental properties. The only exception here is for owner occupiers of small business properties with an annual ratable value of £34,800 or less and certain agricultural properties.

With no plans for specific discretionary schemes to help, commercial property owners will have to rely on the statutory compulsory purchase compensation code to obtain compensation in due course.

Businesses and owners or occupiers of commercial properties would be well advised to ensure they collate detailed contemporaneous evidence showing any losses incurred and any adverse impact caused by the proposed HS2 scheme – such evidence will be of the utmost importance when the opportunity arises to present compensation claims.

The deadline for business owners to present formal petitions against HS2 is May 23.

David Haines is a partner at Charles Russell, a law firm, and head of its HS2 team

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Rival breached our copyright

I own a small agency which has developed a digital programme, for which I recently submitted a patent application. While waiting for this to be approved, however, I have discovered that a foreign company has copied our design and is now selling the programme for profit. It is a much larger company than mine and is able to sell the product at a cheaper rate than we would be able to. I feel this is a copyright breach and need to know where I stand, having not yet received patent approval. I have limited funds as we are a relatively new company, so wondered what my options are in terms of litigation?

It is not uncommon for inventors and developers to find their products infringed or copied by unscrupulous organisations, based both domestically and overseas.

The prospects of your case against the offending party, however, will depend upon its particular facts and the jurisdiction in which the offender operates. With limited funds, litigating abroad (and at home) and then seeking to enforce any judgment obtained can be a nightmare. However, you have a couple of options.

You may wish to consider using a third-party funder, or a specialist company that will fund your case including by paying your lawyers and the other side’s lawyers if you lose and are ordered to pay their costs.

If you lose, they will not seek to recover from you any of the money they have paid on your behalf to run it. However if you win, they will charge a commission or fee.

Send your questions to entrepreneur@ft.com

The usual fee is between 20 and 35 per cent of any amount you are awarded. Otherwise, you could consider seeking a law firm that will work on either a conditional fee agreement or damages-based agreement. Under both you will have no financial risk in the case other than having to pay the other side’s costs; a risk that can also be insured against.

In terms of identifying any other victims of this type of activity and developing a class or group action, it will depend upon the circumstances of their cases as compared to yours (they will need to be very similar). Both third party funders and certain law firms are experts in the field of both assessing the prospects of and funding class actions.

Simon Dluzniak is investment manager at Bentham Europe, a litigation funder

This article has been amended and republished to clarify the deadline for HS2 petitions

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