According to an SHRM study, an estimated 1 in 3 workers voluntarily leave their jobs each year, costing their employers up to 9 months of their salary to hire and train a replacement. Amidst one of the tightest labor markets ever, this statistic might be shocking, but it’s not surprising or unexpected. Employees are sellers in a seller market. They are squarely in control.
Good employees are hard to find and even harder to retain. High turnover rates not only affect overall productivity and the morale of those left behind, but they can also be devastating to your bottom line. And for these reasons, employee job satisfaction should be at the very top of every employer’s list of priorities.
Let’s go through some of the top employee retention strategies used by the highest-rated firms and how you can tailor these strategies to your business.
Ways to Improve Employee Retention
Can you predict an employee’s decision to leave? Yes! Job dissatisfaction and a toxic work environment are two of the biggest predictors of employee turnover. And the opposite is true; companies with high retention rates create an environment that allows their employees to grow and thrive.
Here’s how you can create an employee retention strategy that resonates with your employees and keeps them happily engaged at their jobs.
1. Training and Development
Less training equals higher turnover. Your retention strategy should start the minute a new recruit walks through your doors. Part of this is their onboarding experience. The training and support your employees’ receive from their first day sets the tone for their entire tenure. So, show them the ropes. Give them everything they need to succeed in their role. Otherwise, they could leave within six months of starting.
The second step is to invest in your employees and their professional development. Provide your employees with the opportunity to grow. Create mentorship programs and pay for them to attend conferences, industry events, etc. Investing in them will keep them happy and within your company for longer.
2. Recognition and Reward Systems
Your employees need more than a pat on the back. Everyone wants to be appreciated for what they do. Make it a habit to reward your employees whenever they go the extra mile. Always show your appreciation. Employee recognition can drive productivity and increase job satisfaction. According to the Aberdeen Group, 67% of Best-In-Class companies have a formal employee recognition program in place primarily because it drives engagement and individual performance.
Most companies offer bonuses, increase salaries, gift cards, merit pay, or provide stock options to reward employees. However, you must remember that money alone will not retain most employees. You could have a pay-for-performance plan where employees are compensated for high performance; this is but one piece of the puzzle. Offering soft compensation (non-monetary) rewards goes a long way in differentiating you from other employers. Some non-monetary recognition programs include:
- Giving day offs
- Lunch with the manager or CEO
- New office space
- Flexible work hours and locations
- Job enrichment such as giving employees more opportunities to lead
- Free health check-ups
- Providing childcare/eldercare
Non-cash recognition and reward programs are more memorable and have a more emotional impact.
3. Flexible working arrangements
Gone are the days where working a stifling 9 to 5 was the norm. The workplace is changing, and it’s time employers embraced this trend. By leveraging workplace flexibility, you can increase employee job satisfaction, loyalty, and engagement. It’s the ultimate perk. Better than wellness retreats, on-site fitness centers, or even a higher salary. Here’s an interesting insight, 42% of people would leave their current place of employment for one that offers flexibility.
In a competitive market, offering workplace flexibility is how you brand yourself as an “employer of choice.” Give your employees greater scheduling freedom and let them work from home. It will improve their work-life balance, and they’ll appreciate you for it.
4. Keep an eye on company culture.
People leave managers, not companies. Your company is as good as the people you have at the top. Focus on building leaders, not bosses. Many factors shape corporate culture, leadership being chief among them. Managers influence company culture through leadership and communication. A negative work environment results in unhappy and unengaged staff, high turnover rates, and substandard work – a toxic workplace will push people away.
First, you must clearly articulate company culture as this will make it easier for employees to understand and embrace your values. Your leadership should embody these values and foster honest communication. Then, foster an environment where employees are heard, and their ideas are valued. The best companies are those that foster innovation and give employees the freedom to thrive.
5. Focus on inclusion – not just diversity
Over the last few years, achieving workplace diversity has been a major priority for organizations worldwide. A diverse workforce tends to be more profitable, productive, and innovative with the added perk of having better customer appeal. Diverse hiring is, therefore, a no-brainer. It’s the right thing to do for your bottom line. However, retaining a diverse workforce is just a tad bit more complicated. Essentially, assumptions about diversity in the workplace can lead to a high turnover of staff. Picture this: a Muslim who prays in their car because they don’t want the prejudice that comes with practicing their religion.
Here’s what to do! Focus as much on inclusion as you do on diversity. Don’t assume inclusivity will naturally follow a diverse workforce. Diversity and inclusion might be bedfellows, but the two concepts are crucially distinct. Inclusion is a culture; that recognizes and celebrates people for their differences. It’s an experience that follows when everyone feels welcome and accepted for who they are.
One Size Does Not Fit All
As determined, employee retention rates depend on how satisfied they are with their jobs. But delivering job satisfaction is, well, complicated. You must know your people and what they value. Go the extra mile and offer what other employers can’t. If you have a small business, you can’t compete with the high salaries and benefits of large corporations, but you can offer flexible work arrangements.
So, listen to your people. Make sure to have regular discussions with them to see what issues they might be facing. The key to keeping employees happy and engaged is to make them feel valued and heard.