Employee retention is one of the most important elements of sustaining a great organizational and human resources provision. Retaining employees is essential as this reflects directly on organizational performance, as well as contributing to efficiency and cash flow measures.
This article discusses the importance of employee retention in more detail, as well as the most common reasons people have for leaving jobs. Finally, we discuss twelve employee retention strategies which you can use in your organizations to ensure that you are retaining your very best people.
Employee Experience: Everything You Need to Know
The Importance of Employee Retention
Employee retention is an essential measurement in any business. It effectively helps you diagnose organizational health through understanding the reasons why people leave. Retaining staff means that you are saving money on expensive recruitment programs, and minimizing the cost and time needed to replace an employee and train new people. Turnover often leaves vacancies, meaning that existing employees must work harder or longer hours during periods where the organization is short-staffed. This can sometimes create turnover ‘cycles’ where more people decide to quit, simply because they are overworked.
Employees leaving can also cause productivity issues through staffing challenges. Organizations with high employee turnover start to acquire an unsavory reputation for being difficult to work for, creating challenges with candidate attraction. Finally, it is essential to retain great people as employees are often the greatest source of competitive advantage. Loyal associates are skilled, happy and know the business. They help you keep your organization a great place to work and achieve great results.
The Reasons Employees Leave
There are many reasons employees leave an organization. It’s important to analyze these reasons and understand if there are any trends emerging which might lead you to suspect some action is needed to address challenges in the organization. Here are some the most common reasons – voluntary and involuntary – for people leaving their jobs:
- Dissatisfaction with work-life balance.
- Seeking career growth.
- Dissatisfaction with pay or benefits.
- Not feeling part of the team.
- Conflict with manager or colleague.
- Not feeling aligned to the organizational values or purpose.
- Bette job offer elsewhere.
- Seeking more time with family.
- Childcare commitments.
- Return to study.
- Relocation / repatriation.
- Changes in permission to work.
- Dismissal or other misconduct.
It’s important to note that not all of these reasons can be controlled by the organization, and that some employee turnover is important in order to bring in ‘fresh blood’ and new ideas, as well as facilitating succession planning and allowing high potential employees to grow internally into senior roles.
Actionable Employee Retention Strategies
The key to implementing employee retention strategies is to not focus on just one idea. Do as much as you can to implement employee retention strategies in every area of human resource management. These strategies not only help you retain great people, but they also ensure you are creating proactive and engaged workforces which will make a big impact on the organizational bottom line.
Optimize the Onboarding Process
The risk of employees leaving the business is highest in the first twelve weeks of service than at any other point. Employees seek an inclusive, informative, and supportive onboarding process, and creating one isn’t easy. Leaders should ensure that new employees have a buddy, a training plan, and regular meetings with their manager to review targets, progress and simply to check in. Another important aspect of onboarding is the notion of socialization, where employees have time to settle in their team and build rapport with their colleagues.
Provide Workplace Perks
Employers who provide a comprehensive suite of workplace perks are more likely to be able to retain their employees. The best way of going about this provision is to consult with employees over what they want. This way, when the time comes to negotiate and implement perks and benefits, the organization will know that this is directly aligned to the needs and wants of its people. Commonly, employees want a wide variety of benefits which can be used in everyday life. This includes a decent pension plan, grocery discounts, health care, dental care, gym memberships, travel benefits, and even extra days leave or paid time off.
Compensate Employees Fairly
One of the basic human needs is financial security. When considering employee retention strategies, checking that salaries and financial benefits are competitive should always be one of the most important places to start with. Employers must conduct regular wage surveys, regularly evaluate incentives and bonuses, and consider retirement plans. Additionally, there should be a fair and transparent process regarding salary increases, and what employees need to do to request a raise. Salary caps and ranges must be adhered to in order to make this very sensitive issue consistent and fair.
Focus on Employee Wellness
Employees are seeking workplaces which understand and appreciate employee wellness needs, and put in place programs which focus on physical, mental, and financial well-being. Wellness interventions might be connected to benefits and pension plans, but also can be implemented through socialization activities, and wellbeing committees which aim to train employees on how to incorporate wellness into their working lives. For example, many employers focus on physical wellbeing through activities like running or cycling clubs, and generally aim to bring people together to collectively support and advise each other on wellbeing issues.
Implement Feedback and Surveys
Employees can be surveyed at many times during their working life. This might start with feedback about the recruitment and onboarding processes, and general working life might be evaluated with stay interviews and engagement surveys. Finally, when an employee decides to resign, there might be an exit interview.
It is critical that these surveys are used and valued by senior management and HR. It is easy to look at the general results and ignore the details and data. Deep dive into survey results and meet with teams and individuals to understand more about what can be done to improve the workplace. Follow up on surveys and create action plans to demonstrate that employee feedback is being noticed and used.
Offer Growth Opportunities
Most team members want to grow their careers, and they will prefer to do this through being promoted within their own organization. Leaders and HR teams must provide training and development to ensure employees are skilled and able to grow. On top of this, succession planning and skill inventories must be used to create pathways to senior jobs. These succession plans must be actionable and inclusive, and backed up by senior leaders, who meet regularly and review top talent who might be next in line for promotion.
Although an employee retention plan should focus on retaining everyone, care must be made to ensure any high potential employees are especially looked after, to ensure these key contributors are not poached by a competitor.
Effective communication channels and an internal communications strategy is an essential part of any employee retention plan. All communication in the business must be consistent and fair, serving to inform all employees and keep them all on the same page. To this end, an effective communication strategy should create multiple avenues for information to be shared, connect employees with senior leaders, and provide opportunities for collaboration.
There are many ways to achieve these objectives, but most recently the use of technology such as virtual meetings and messenger applications are great tools to keep people connected and equipped with the right knowledge.
Involve Employees in Decision-Making
Empowering employees is a great way to retain them as it allows them to contribute more at work, with a higher degree of autonomy. Employees who are equipped with the right knowledge to make good decisions will learn more and become more experienced. Consequently, they will feel more motivated and contribute more to the organization.
Leaders must not only be trained on how to empower employees and facilitate the sharing of knowledge, but also in setting limits on what employees can and cannot do. This will minimize the risk of incorrect and expensive decisions being made.
Encourage Work-Life Balance
Work-life balance is one of the most sought-after benefits at work, especially for younger employees, who value this more than salary and financial perks. Work-life balance isn’t simply all about ensuring employees can go home on time and not overworked. Employers should also investigate the implementation of flexible working interventions, such as agile working, remote working, compressed hours, or flextime, which might encourage employees to adopt an atypical working pattern in order to maximize their personal lives and feel happier coming to work and being at their most productive.
Hire for Culture Fit
Values-based recruiting is a powerful way to find the right people for your organization. If employees are the right fit in terms of organizational culture, purpose, and values, they will naturally be more inclined to stay longer as they will feel that the organization mirrors who they are.
The best way to hire for cultural fit is to firstly advertise the values and culture of the company. This information is worked into the interview process, and made very clear to candidates, who can self-select out of the process they feel there is little alignment. It is critical to carry through cultural and value-based processes into the workplace, so as not to be seen to mislead candidates or fail to deliver on what they have been expecting.
Create a Mobile-friendly Workplace
Connected to the notion of flexible working and transparent communication is the need to create mobile friendly workplaces. Such workplaces encourage hybrid or remote working and use cloud-based technology and collaboration programs to ensure that people can contribute equally, whether they are in the office or not.
If the organization operates a ‘bring your own device’ (BYOD) policy, then they should create private login credentials for employees. Mobile-friendly workplaces are great for employee retention as they encourage employees to work at their best, when they want. This way, employees can stay productive and more engaged, while keeping focused on their goals and tasks.
Implement a Recognition Program
It’s too easy for leaders to focus too much on constructive feedback while ignoring praise and other positive affirmation. Creating a structured recognition program will ensure that employees feel valued and are rewarded for the great work they are doing.
Recognition programs must be designed to be inclusive and comprehensive, ensuring that no employee is left out. They should include formal and informal recognition (tangible reward versus a simple “thank you” and include a budget and limits as to what can be awarded and by whom. HR and leaders should take the lead on this program and ensure it is being used by everyone, in the right way.
HR teams and leaders must actively direct an effective and impactful employee retention strategy, using as many tips and tricks as they can. Minimizing labor turnover will ensure that your team is happy, the organization is saving money and you are creating a sustainable culture of happy and content workers who are productive and achieving great results.
Considering which strategies to implement to drive employee retention might come off the back of an engagement survey or analyzing turnover or data from exit interviews, but don’t limit yourself to just one or two ideas. Remember that employee turnover can come from any angle, and it’s the duty of leadership and HR to be fully prepared for this.