In today's economy, employees switch jobs at a much faster rate than their parents and grandparents. For companies to retain their employees, they have to get creative. In this episode of The ROI Podcast, Mike Petrie breaks down how Merchants Bank of Indiana has kept a 90%+ employee retention rate.
Shane: Hello all of you ROI Podcast listeners! Let me ask you something, how many jobs have you had in your lifetime? If you’re a college graduate, how many jobs have you held since graduating college? Well, especially for us millennials and Gen Z’ers, the data shows that we change jobs much more frequently than say the baby boomer generation… And we’ve talked about this in previous episodes of the podcast. So if you’re a manager in a company – or you’re aspiring to take-on a leadership role – keeping your employees is going to be a real challenge for you. And today, you’re going to hear from someone who’s mastered this – and we’ll reveal what his secret is to keeping his employee retention rate above 90 percent! Let’s start the show!
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Shane: Alright everyone – welcome back. I’m Shane Simmons and we are pumped that you are here listening to The ROI Podcast presented by the Kelley School of Business on the IUPUI Campus in downtown Indianapolis. So, as you picked up from our introduction, we’re talking about employee retention, especially as you begin to see major growth in a company and your human capital suddenly becomes a huge expense when you have to find replacements for those who may have moved on. We talked about this issue before with one of our previous guests, Val Grubb, who put it like this.
Val Grubb: As a manager, you've got to be better at your game. You've got to be much more about goal setting, you're really got to coach and provide that feedback, and really allow flexibility at the office.
Shane: We’ve learned through these 50+ interviews we’ve done that people are so valuable – the best asset to the company. For you longtime ROI listeners, you may remember Randy Stocklin, the CEO of an e-commerce business in Greenwood, Indiana talk about the value of people.
Randy Stocklin: We quickly learned that people make or break a business. For us, our business has always been very people-centric, one of our core values is our people matter most.
Shane: People are switching jobs quickly. How do you keep them in your organization and avoid losing them to other businesses?
Mike Petrie: The biggest thing is providing a vision for people to follow because people need to know where they're going.
Shane: That was Mike Petrie, Director, Chairman, and CEO of Merchants Bank of Indiana, which holds more than $3.7 Billion in assets and is consistently listed as one of Indiana’s best places to work. To receive that kind of recognition, you have to be doing something right – while still growing at a fast clip with more than 200 employees. So, we asked Mike, how do they do it? What’s the secret to keeping your employees at the company in this day in age when people switch jobs faster than ever?
Mike Petrie: One of the things about our culture, my partner and I are pretty fortunate in what's allowed us to be successful - ever since we've been in business, we've made well over $12B in multi-family loans. That's been over a period of 28-29 years and we've had one $2M loan go bad over that course of time, just one. IN the industry, we're known as people who really underwrite good loans, so then that helps you when you want to sell a loan. That's the culture that we wanted our employees to embrace -don't chase bad loans or just do one, make sure it's good so that we're around for 20 years.
Shane: So that’s the first piece of insight Mike wants us to remember – so write this down: you need to have a great product.
Mike Petrie: First, your customer has to be successful using your tool in order for you to be successful. That's kind of the same thing we had, our goal is to lend people money so that they can be successful and grow their businesses - if they're successful, we are too. It's the same thought process. When you go to work, you want your employees to be successful so that you can be successful. Everyone has to succeed in order for you to succeed. It's got to be a win-win.
Shane: That’s first and foremost. If the product stinks, your employees will know it stinks, and they aren’t going to be passionate about it. And we know from various studies that passionate, engaged employees are more loyal to the company. So that’s tip number one.
Mike Petrie: The other thing is, part of our culture was to educate everybody. I can't tell you how many MBAs I've bought here at IU that we've trained - I trained my people just like I was, I got my undergrad here and my MBA here while I was working at Merchant's National Bank. I've done the same for my employees, [because] if we invest in them, they know we want them to stick around, and we have a very high retention rate, 90%. We have a lot of people that have been around, been educated, we moved them up, there's a lot of opportunity for them, and for the last three years, we've been one of the top places in Indiana to work, according to that [Indy] Chamber of Commerce survey. We invest in our employees so that they improve their careers, which benefit us as they develop these products and sell loans off.
Shane: There’s tip number two from Mike – develop your employees. Offer incentives for them to further their skill set and education. This again shows them that you care about their development, but it’s also benefiting the company in a major way by creating a better product or service.
Shane: And finally: communicate. Talk with your teams, make sure their managers are having discussions with them… At the end of the day, help improve your employees. Make them better at everything they do – and show you truly care about their future. If you do this, it will pass down to the customer, which will feed into results – and that’s a winning formula for keeping employees and a thriving business.
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Shane: Closing comments