Chip Conley, CEO of luxury boutique hotel chain, Joie de Vivre, was interviewed by WSJ writer, Phred Dvorak, about how he keeps his employees happy and in return, reduces turnover within his company.

According to the article, losing an employee costs Joie de Vivre an average of $5,000 in lost productivity and recruiting expenses.  Combine that with the Company’s 2,500 employees and a recent marketing survey by Market Metrix that estimates hotels will lose two-thirds of employees to turnover each year and you’ve got yourself an expensive headache.

Chip obviously agrees and that’s why he is striving to make his company fun. How does he do this? In the article, he talks about sponsoring parties, awards, arranging paid annual retreats and regular dinners for employees who want to stay after hours to chat with each other. He also offers employees free classes on all types of subjects, including English as a second language. Chip even buys new vacuums every year for his housekeeping staff.

While these gestures may seem expensive, they costs no where near $5,000 per employee and his efforts seem to be paying off. Joie de Vivre has only 25% - 30% employee turnover as compared to other hotels that are experiencing twice that amount.

Chip’s tips for keeping employees loyal and satisfied:

• The workplace is a community, make it feel like one
• Listen to employees
• Keep managers accessible
• Help employees see how their work affects others
• Recognize and reward good work

For more info about Chip and his strategies for keeping employees happy, check out his new book, Peak: How Great Companies Get Their Mojo from Maslow