In a period of peak employment, with significant hiring challenges for most companies and huge demand for talent, retaining your employees has never been more important.
5 reasons why you should be focusing on employee retention:
- It’s way cheaper than the time and financial cost of hiring and training new employees
- The knowledge accumulated by employees can be difficult to replicate.
- Your ability to trust tenured employees and hand off tasks and responsibilities can be a great benefit.
- One thing leads to another. Retention, or adversely, employee turnover, can result in more of the same. If you have high turnover, other employees are more likely to leave. If you have great retention, chances are others will stay.
- Impact on hiring. One of the key things any potential new employee looks for is your retention rate. You will not secure top talent if they see red flags from a company that cannot retain its people.
Here are 8 key strategies to improving your employee retention:
Culture is key. It doesn’t mean you have to provide table tennis and kegs of beer but having an appealing work environment is essential.
It means recruiting workers who fit your organization’s vision and providing employees with autonomy and a place where they are encouraged to talk, collaborate and get to know each other. Employees want to work with other people who are passionate and driven. Collaborating with such people is the key to a positive culture. Essentially, for an organization to successfully create and maintain a positive company culture, you must be clear on what you want from your people. The story of culture is tied up with that of leadership. Of course, it goes without saying that founders should live these values if they want their culture to be taken seriously.
Competitive perks and compensation. Paying at least at market rate and rewarding performance.
Keep in mind that perks are an important aspect, but not the magic solution to a systemic employee retention problem. However, according to a MetLife survey, 73% of employees said that having the right benefits to meet their needs would increase loyalty to their employer. Here are a few ideas to increase employee retention using perks:
Compensation lets your employees know they are appreciated for their hard work. One of the most effective ways compensation can have a positive impact on employee retention is to construct an employee development plan that promises employees career track opportunities with the company. Being on an upward career track should come with corresponding salary and merit increases. In addition, performance-based bonuses motivate employees in terms of aligning their individual goals with company goals. Appreciation is key to employee retention, and if compensation is a part of recognition, then compensation is likely to increase employee retention. Conducting compensation benchmarking for your company can be a key strategy to addressing these areas (contact a Partner at Taylor Ryan if this is of interest!). Contact us
Personalized perks: These are 100% customized to the unique needs, preferences, life stages, dietary restrictions, locations of employees, and everything else which indicates preference. By using a concept called Lifestyle Spending Accounts (LSA), each employee can get the perks they want and need the most. This way, employees won’t feel excluded -imagine having a fully-stacked coffee bar and only drinking tea or having a free CrossFit membership and preferring yoga instead. Additionally, perks become easier to administer and track and give you a better idea of the ROI. Finally, another pro of having LSAs is that perks become tax compliant and CFOs and finance teams can rest easy knowing that all the data is there in case they are audited.
Office space. Employees spend 1/3 of their day at work. Is your office a dimly lit 1980’s cubicle, or an environment where people actually want to spend their time?
In the 2000s we saw the death of cubicles and the rise of open floor plans, and during 2015, ping pong and foosball tables were in offices everywhere. While office trends come and go, one thing that does not change is the impact that the office environment has on employee health and wellbeing. A quality workspace design leads to a less stressful and more productive atmosphere. Employees need to feel comfortable and calm in their physical work settings to produce their best work. Workplace design that considers air quality, lighting, views onto nature and the general layout of the interior can significantly impact on health, satisfaction, wellbeing and staff productivity.
Meritocratic – rewarding and promoting based on performance and results vs tenure or favoritism.
This method not only provides motivation for employees to perform at an optimal level, it differentiates between high-performing employees and those who perform poorly, encouraging self-determination. However, for everybody to get the most out of the merit-based program, the goals must be clear. There’s no one right answer for the pay structure your company should adopt — as long as you do your research, make the best choice for you and roll it out thoughtfully, you’ll be setting yourself up for success. Conducting compensation benchmarking for your company can be a key strategy to address this.
Clear communication. Is the company’s mission and strategy clear so that employees have a sense of purpose?
Working towards a common goal and having a sense of purpose gives meaning to the everyday tasks of employees, which will increase motivation and productivity. Communication in turn can be seen as the key driver of an organizational culture to succeed and deliver. Clear and continuous communication from all levels of management is the only way the sense of purpose can be incorporated in the day-to-day activity of employees.
Flexibility: that makes it easier for people to manage their lives.
Having workplace flexibility as a company costs you nothing and can make a huge impact in your employees’ lives. Things such as telecommuting, remote work, part time work, TimeShift, or other arrangements result in employees being on average 50% more likely to be satisfied at work according to a 2018 Werk survey. Whilst some traditional schools of thought believe longer hours create more productivity, it’s often not the case. Consequently, employees that are given any kind of flexibility are more likely to perform better and stay at that job for longer.
Creating opportunities to learn, develop and take on responsibly, even if a promotion isn’t possible.
Performance management is a key tool in helping ensure employees learn and grow. It’s not just about measuring performance, as ensuring each employee have goals that are important to them,and fit with the needs of the company. Providing constructive and useful feedback, as well as positive reinforcement is all part of performance management. Sit down with your employees, or have your managers do this and discuss individual interests and career goals. This conversation will help identify the development activities that each of them should be undertaking. After all, not everyone shares the same goals or has the same perspective about what they want to achieve in their career. Still others may be unsure about what they want to do.
Help your employees access additional resource and contacts that might help them grow. Introducing them to other professionals can create great networking opportunities. Sign them up for professional associations or send them to training courses and workshops. This helps employees grow professionally and it gives the organization another ambassador for the business.
Some turnover of staff can be a good thing. Some organizations make a habit of replacing their bottom 10% of performers on a regular basis. Obviously, this has its own set of challenges – like having people fearing for their jobs. This doesn’t create an environment of trust. However, sometimes, bringing new people into a company brings fresh ideas, a new lease of energy and motivation, and can have a positive impact on the whole team.
You cannot retain everyone. Some will leave through natural attrition and an environment which supports people in their careers, regardless of whether that means them leaving, will surely have a positive impact on all other team members.
Retention and turnover affect everyone in the company, not to mention your bottom line. Getting a handle on the employee retention factors is no easy task but doing so pays dividends far into the future. It never hurts to regularly review your retention strategy to ensure you’re doing the best you can to provide stellar working conditions and keep your team happy and healthy.
If you need help with any People related issues or hiring: Contact a Partner at Taylor Ryan for a free consultation.