Employee turnover is quite a costly affair. When an employee quits, companies have to go through the hassle of finding a replacement, training them, and most importantly, they need to ensure that the new employee remains with the organization. It goes without saying that it is devastating if the person who left the company is a top performer. When your best employees leave, their teams end up with more work, and you find that your company is performing sub optimally.
For ensuring that regular operations aren’t disrupted and that you don’t have to spend exorbitantly on hiring new workers, companies need to implement employee retention strategies that have a proven track record. Vitally, companies need to prioritize hiring people who share the brand’s values and make sure their employees find work meaningful and rewarding on all fronts. Moreover, you need to ensure that employees don’t feel burned out or bored with their jobs. It is also quite important to let top performers know they are valued, by promoting them or giving them added responsibility—with a proportional increase in their pay, of course.
But before you can put in place effective employee retention strategies, you need to have a clear understanding of what retention is, what it takes to attract and retain employees and why it matters a lot more than you can imagine.
What is employee retention?
Employee retention is when a company gets its workers to stay on without quitting. In other words, it can be considered as a process where the employees of the company are encouraged and motivated to remain in the organisation for a longer period of time. Every company and industry has its own retention rate depending on the strategies they have put in place to prevent employee turnover, which is when workers leave their jobs for various reasons.
Why does employee retention matter to every company?
A coherent employee retention strategy needs to be in place if companies want to avoid the costs associated with employees leaving their jobs. A study has found that the average employee exit costs 33% of their annual salary. This cost is due to the price a company has to pay for the lost productivity and the hiring and training of new talent.
Cost isn’t the only consideration. Having higher rates of retention also plays a vital role in boosting sales and employee morale. Besides, employee retention is essential for employee engagement, which is a factor that drives up customer loyalty, productivity, and overall profitability, according to Gallup.
It is also worth noting that retention pays off in the long run. Predictions from Korn Ferry estimate that there will be a shortage of talent by 2030 to the tune of 85.2 million people, which means companies will have $1.75 trillion in unrealized annual revenue if they don’t make it a priority to reduce their turnover rate.
Top 15 strategies for Employee Retention
1. Build employee engagement
Undoubtedly, having an engaged workforce is key to employee retention. A Gallup study found that 73% of actively disengaged employees and 56% of somewhat disengaged workers seek a different job.
Consequently, your work as an employer should be to find out what makes employees engage, care about their job, and stick around for the long haul. For maintaining an engaged workforce, you need to ensure that people have the skills to do their respective jobs.
Proper training and mentorship go a long way in making people well-equipped to handle their jobs. Further, you need to provide career advancement options, competitive pay, and the space for employees to be creative if you want them to stay for long with you.
2. Recruit the right employees
Hiring the right people is among the most important things to do if you want your employees to stay with you for a long time. From the onset, you need to communicate your expectations, learn what the employee expects from the job, and avoid potential mismatches in skills, responsibilities, or experience.
Because bad hiring decisions cause 80% of employee turnover, companies also need to hire people best suited for the company culture. While hiring, make sure to ask probing questions and look for innovative answers that tell you the person will fit your company.
3. Create an exceptional onboarding experience
A poor onboarding process is one of the primary reasons companies lose out on great workers just months after hiring them. According to a study, 76% of workplaces aren’t onboarding new hires properly, providing a bad employee experience at the onset itself. Meanwhile, only 47% of the respondents believed that their company’s onboarding program facilitated employee retention.
With a poor onboarding process, you end up with high levels of employee turnover. To improve the experience of new recruits, managers need to prioritize putting in strategies that will integrate the newcomers into the company and team.
These processes need to be less about paperwork and more about getting the employee excited about their work by explaining their role in the organization and making them feel welcome.
4. Provide avenues for professional development
Employees who are worth retaining for the long run want career advancement opportunities in the form of promotions and more challenging work. This is because staying in the same role for years on end can have a toll on their motivation and engagement levels.
Companies sometimes lose out on top talent because they have policies in place regarding the frequency and nature of promotions that limit employee growth. It would be worthwhile to examine company policies and ensure that your employees can scale up in their careers with leadership or advanced technical roles that will motivate them to stay at your company for long.
For bettering the chances of professional development, employees need to be subjected to cross-departmental training sessions. For instance, a salesperson can learn valuable lessons in the kind of questions that potential customers may ask from a member of the technical support team.
Another area to focus on for enabling professional development is soft skill training. Given the benefit of soft skills in the workplace, employees with excellent soft skills are bound to perform well and shine at your company.
In addition to this, companies can invest in learning management systems, which are a cost-effective way for employees to develop themselves.
5. Get recognition and rewards right for efforts and results
Thanking and acknowledging employees for their work can be a huge factor in helping the company retain top talent. This can be in the form of awards, bonuses, and other perks that motivate employees to remain engaged in their work.
Providing recognition isn’t just about rewarding excellent work. It also needs to be about shining a spotlight on employees who meet learning or development goals or achieve something that reinforces corporate principles. When this is done, employees understand that they are valued members of the organization, which will, in turn, bring down the turnover rate.
Commonly, companies give out promotions after their performance review on a quarterly/ yearly basis. But there are also other ways to show an employee how valuable they are.
For instance, companies can offer flexible schedules, a new title, paid time off, paid vacations, sick days, dinners, trips, etc.
Other than this, employees can be incentivized to stay with more significant rewards, such as tuition reimbursement. If you feel that an employee has what it takes to grow with the company, you can even introduce stock programs.
6. Practice feedback culture
Employees need positive and constructive feedback in order to grow in the organization. When employees know they are making a difference to the company and doing their best work, they are unlikely to leave you for your competition.
It is also equally crucial for your employees to give you feedback. This is because a lack of listening can make employees feel that the company isn’t interested in their wellbeing or doesn’t want to pursue worthy ideas.
To avoid this situation, companies need to encourage employees to provide both private and public feedback, depending on the situation.
7. Foster work-life balance
Employees with more time for leisure, personal care, and family are not just more productive, but they are also more likely to stay with the company for years to come. This is why companies need to encourage a healthy work-life balance.
Employees getting the weekends off and working a reasonable number of hours a week are guaranteed to get more done and be safe from burnout. Also, you can offer flexible working hours, which allows employees to work in slots they are more comfortable with, as long as they are productive and perform the required hours.
To ensure that employees have an excellent work-life balance, employers can implement regular work hours, provide work from home/ remote work/ hybrid work arrangements (a mix of remote and onsite work), and even encourage employees to take breaks in between their working hours to get a healthy meal/quick workout.
Further, companies can make use of permanent part-time work arrangements to attract top talent who will stick with them for long.
8. Make good connections with your employees.
Taking the time to engage and form relationships with employees will have a dramatic impact on retention rates. This is because a connected workforce gives people purpose and the feeling that they are part of a family with a single objective.
Companies will be surprised with the results they can achieve in terms of building commitment and enthusiasm if they make an effort to strengthen their bonds with their employees.
You can do that by letting them express their ideas, providing them with adequate growth opportunities, recognizing their excellent work, and empowering them with the necessary resources and tools to perform better.
9. Offer Mentorship programs
The right mentorship programs can have a profound impact on employee retention rates. When done right, you can ensure that top talent remains engaged in their work and grow with the company. Impressively, proper mentoring can improve retention rates by about 50%.
Mentoring doesn’t just help you retain more of your best performers by upskilling them, but it also leads to stronger bonds between employees and consequently makes them less likely to leave.
10. Engage your employees in Corporate Social Responsibility (CSR) programs
CSR activities, when done by your employees, have the ability to help your team grow closer together, bolster the name of your brand, and consequently bring down employee retention rates.
Forbes has found that over half of the workforce preferred to work in a job that allowed them to make an impact. Interestingly, around 35% of the people polled said they would be willing to work for lesser pay if their company is committed to CSR initiatives.
Therefore, it is vital for employee retention that you participate in CSR initiatives with your employees at the forefront. It is further worth noting that the initiatives need to be based on something your employees care about. For maximum effect, these CSR efforts need to be authentic and consistent as well.
11. Provide competitive pay and benefits
This is among the best things you can do to ensure that your best employees stay with you for a long time. Make your employees feel valued with a competitive base salary or an hourly wage. Otherwise, you will find your top talent deserting you just to be replaced by low performers.
As an employer, you mainly need to ensure that all your team members are able to cover their basic expenses while feeling they are doing rewarding work.
12. Offer wellness programs
Wellness programs work great when it comes to having grateful employees who not just stay on but also recommend your company to other top talent. Given how the pandemic has made seemingly everyone more isolated and miserable, companies will do well to focus on wellness programs centered on bettering employee health, both physical and mental.
Apart from ensuring that conditions at the office are healthy, employers can offer seminars, support groups, therapy sessions, medical coverage, guided meditation session, etc., in order to keep workers in great shape.
Additionally, companies can hire medical professionals to help their employees manage chronic conditions, such as heart problems, asthma, and diabetes.
13. Promote transparent communication
If you want to retain the maximum number of employees, you need to ensure complete transparency in communication. Doing so will make your employees trust you more. Further, it will go a long way in improving employee engagement.
Employees will be pretty grateful if you take the time to clarify any changes you may have made to the company’s vision and values. You can further boost transparency by involving your employees in making significant decisions.
Sharing the company’s financial data with the employees, which may seem to be a radical move, is actually a great way to build an atmosphere of transparency. A case in point is the success that social media company Buffer had with making all their employee salary information public. By doing so, the company made sure that the employees knew how the salaries were calculated and that they felt the company valued them enough to be open with the information.
Another noteworthy example is LinkedIn’s CEO, Jeff Weiner, who secured the top ratings on Glassdoor for running a company built on transparency. To get everyone’s input, he would put in the time to hold company-wide, bi-weekly meetings where all the employees could make their suggestions.
14. Encourage creativity
For employees to stay engaged for long with their work, they need to be given the space to be creative. While many companies say they value creativity, very few have actual initiatives to foster employee creativity.
To truly create a workspace that encourages employees to be creative, so they stay longer with the company, you can implement initiatives, such as the 20% program, allowing employees to work on side projects of their choice for some time each day.
For ensuring that the creative spark doesn’t die, employers can offer rewards to employees with creative suggestions. You can also make it a point to encourage risk-taking.
Moreover, companies can step things up with the creation of teams dedicated to coming up with new ideas. Apart from this, to foster creativity, companies need to make it a priority to hire people from diverse backgrounds.
15. Build your “Brand”
It goes without saying how difficult it is to hire a replacement, train them, and ensure they stay on. As a result, if you want your best employees to stay on, you should focus on becoming a brand they’re proud of.
Ensure that your brand is known for positive things, such as a recycling program, CSR initiatives, support for the local community, etc. Moreover, employees will stay longer if they feel their work is adding value in areas such as the environment, equality, and education.
The last couple of years with the pandemic have been devastating for both employees and employers. It is hence more important than ever to find and retain the best talent in the industry by meeting current employee expectations, such as allowing remote work.
Doing so will go a long way in bringing down the expenses your company has to deal with when it comes to replacing top talent. Most importantly, keeping your best workers happy is a sure-fire way to guarantee that your company is sustainable in the long run.