What is employee retention?
You've worked hard scouting for top talent and training your workforce to perform effectively. You spend thousands of dollars onboarding and providing job-specific training, only to find your valued employees are planning to jump ship and go join your competitor.
It's time to turn your focus to employee retention: keeping your valuable employees loyal and committed to your organization, working as a team toward the same goals without any desire to check out “greener pastures” on the other side of the divide. Employee retention is defined as the ability to train, develop and retain talent through employee satisfaction, job enrichment, and employee advancement.
No matter what size your business is, employee retention should be a top priority. Each employee you hire has cost you time and money to train them so they are a valuable asset to your company. Not only are you investing your time in these individuals, but more importantly you are investing your trust. And when that employee leaves the organization after just three months of working there, this causes confusion within the rest of the workforce about their role or value within the organization. Job satisfaction takes a nosedive, and everyone else wishes they were somewhere else. The solution? Effective employee retention ideas.
Employee retention statistics
Employee retention statistics indicate that employee turnover was as high as 57.3% in 2020. How much does poor employee retention cost at your company? According to Forbes, Employee turnover is not just an issue for the human resources department. Operating units feel the pain of turnover in productivity, product quality, and customer service. If you include the value of lost customers and increased recruiting expenses, then employee attrition costs can pass the $30 billion mark! The cost includes time spent by managers recruiting new employees, training them, and eventually losing them again: an astonishing twenty percent of employee turnover occurs within the first year after hire according to SHRM (Society for Human Resource Management).
Here are a few more statistics worth noting:
- More than 3/4s of employees who quit could have been retained had their companies made the effort. ( Work Institute)
- Workers who are engaged are 59% less likely to look for a new job in the next 12 months. (Gallup)
- 92 percent of workers said they would stay with their companies if their supervisors showed a little more empathy. (Businessolver)
Notice a common trend? People are leaving because they don’t feel valued. Lack of employee engagement, employee appreciation, and employee recognition are the three main forces driving employee attrition, and if we want to retain our employees we need to let them know how much they matter to our organizations.
Here’s one more for the books: the total cost of turnover has been estimated to be 200% of an annual salary, and turnover-related costs represent 40% of pre-tax income for companies at the 75th percentile.
Employee turnover is expensive; who can we turn to for help? Look no further than your own employees! Your workforce knows what motivates them to produce their best efforts, what makes them tick. The study of employee motivation is the science behind employee retention programs and employee engagement surveys. See how much employee turnover is costing your company.
How to improve employee retention at your company
Sometimes, self-rating is the best place to start! The employee experience at your company is what determines your voluntary turnover, and job satisfaction is where you want to begin. Here are 11 questions you can ask yourself to determine how your company ranks as an employee-friendly place to work:
- Are employees allowed to express their creativity at the office (using employee suggestion schemes) or do they feel stifled by bureaucracy?
- Do staff have clear goals and objectives, meaning that there is enough room for focused individual effort on both horizontal and vertical career growth?
- Does your company pride itself on being a "fun" place where people enjoy working? Or is it a place to be feared and respected?
- Do employees have a say in decisions that affect them or is it always top management who decides everything? Are employee opinions taken into consideration when planning company strategy, budgeting and allocating company resources, etc.?
- Is there a good work/life balance? Is your organization flexible enough to allow employees the option of working from home occasionally so they do not need to sacrifice time with their family for work purposes? Are there practical employee benefits and employee discounts?
- Do you have an effective employee onboarding process, and are new hires provided with adequate training and orientation? Does your company culture welcome new hires into the fold, or are they treated like outsiders until they have served their time?
- If you can spare some money, does your company offer its workforce training courses empowered by learning management systems (LMS)? These will provide clear career paths and promote employee growth.
- Does your company provide employee retention incentives such as employee engagement bonuses or employee recognition awards, in addition to qualified wages?
- Does it have a proper employee development plan in place for those interested in pursuing careers beyond the senior management echelon?
- Are employees encouraged to discuss harassment issues with someone in a fair, impartial manner within the organization? Is your HR leader approachable and considered fair by your team?
- Finally, does your company offer its workforce a sense of purpose by giving back to society, or at least making an effort to do so (corporate social responsibility initiatives)?
If you answered "Yes" to most of these questions, then congratulations! You are doing things right and should have a team that’s happy and engaged. Employee morale will be high, and even top talent retention a non-issue. Your employee retention rate is not something you need to worry about at this time, though it never hurts to add in a few development programs or write a few more appreciation notes!
But if you answered no to more than half of these questions, then it is time you thought about employee retention policies and employee engagement strategies and made a plan to improve your employee retention. A focus on questions to which you answered no will help you plan employee development initiatives that will address the issues holding back employee satisfaction levels at your organization.
Employee retention best practices
Employee retention is all about employee satisfaction, employee engagement, and employee development. A strong employee retention practice can offer you an edge over your competitors in the global marketplace. It will also help you attract top talent if your company is known as a great place to work.
So what are you waiting for? Start working on that employee retention strategy today! You may want to include the following best practices:
- Start employee retention initiatives by making employee benefits and employee engagement important. Ensure that you offer competitive employee benefits (health and wellness programs, childcare, etc.) and engage workers through company culture surveys.
- Offer opportunities for cross-training or secondments. People who are sometimes able to step out of their comfort zones usually perform better because they expand their knowledge base. As such, consider cross-training employees (and offering opportunities for secondments) so that they can develop new skills and perspectives on business. This will also help them adapt more quickly should the need arise to change roles or departments.
- Promote employee development and career progression. Provide regular employee development initiatives that are designed to help staff advance their careers through training, employee retention surveys, or secondments. Also, provide staff with support for educational qualifications by offering tuition reimbursement plans.
- Keep your managers accountable, and ensure everyone knows exactly what they are supposed to do. If you want to encourage employee engagement, it is important that employees know exactly what they are supposed to do at work. Create clearly defined employee duties, roles, and responsibilities across all levels of staff so that people feel empowered rather than powerless in the workplace.
Utilizing employee retention surveys
An employee retention survey enables you to collect employee feedback about different aspects of your company's performance. These scores can be compared to past years' results to establish benchmarks for improvement. It will also help you identify any potential problems currently taking place within your organization since these could be the main causes for high employee turnover rates.
Key principles that are important when designing employee retention research questionnaires:
- Employee engagement needs to be taken into consideration when asking employees questions related to employee loyalty. They should not feel as if they are being forced or manipulated into answering employee retention questions in a certain way.
- The survey should be as brief and simple as possible to increase employee participation rates; employee retention questionnaires with too many questions will also contribute to employee engagement scores dropping.
Key principles of an employee retention program
Here are a few important principles to keep in mind as you plan your employee retention program:
- Everyone has a value: The most effective employee retention strategies make employees feel like their efforts and contributions really matter to the company - that they are not just another cog in the machine.
- Relationships trump policies: Your employee retention plan will be ineffective if you do not foster good relationships with your staff. People want to work for managers who provide support and encouragement, helping them develop contentment and happiness at work.
- Transparency is important: Effective employee retention tactics require employers to be open about what is going on within the company so that workers feel more engaged. If there are any new changes occurring, such as expansion or new initiatives, it's best to keep employees informed via employee newsletters or meetings.
Forming your own employee retention strategy
The key to forming your own employee retention strategy is being a great listener. Listen to what your employees want and what their felt needs are. You'll want to start with an employee retention survey, then analyze that to determine your priorities in putting together a custom employee retention strategy for your organization.
An employee retention policy should be well thought out, easy to understand, and practical in terms of the goals you want it to accomplish. A written employee retention plan will clearly lay down all your intentions in regard to dealing with employees who are underperforming in their roles. You should definitely consider implementing a strong employee performance appraisal system that gives clear guidelines on how staff can better themselves at work.
Some areas you may wish to address in your retention policy:
- Employee appreciation/ recognition program
- Flexible working hours/ vacation time
- Job enrichment and employee education
- Opportunities for leadership
- Job rotations and in-company mobility
Implementing an employee retention policy
Once you've got your strategy mapped out, the hard work is done. Now all that is left is implementation. The employee retention policy should be communicated to employees via employee newsletters or employee meetings. This employee retention plan should also be clearly outlined in the employee handbook.
Make sure your human resources staff, managers, and team leaders are all on board with your new strategy and understand the planned implementation. Then focus on making it real. Many companies find it helpful to keep careful tabs on internal statistics that can inform them how successful a new employee retention policy really is.
As you begin to implement your program, don’t forget to engage employees in the process of employee retention. Keep your workforce involved by encouraging employee buy-in to employee retention goals and employee development initiatives.
It is also important to remember that even though you are the employer or manager, you are not always right. Ask employees for their opinion on company policy, especially if it affects them directly. Encourage feedback sessions where workers can bring up any topic related to changes made at the corporate level, from wages to the hiring process, to new contracts, or employer branding. You may be surprised at how little it actually takes to turn disgruntled employees into loyal ones.
Final tips on an effective employee retention plan
One key to success here is to identify which employee retention techniques seem to be working for your company and stick with them. Even if they are not 100% effective, small changes can go a long way towards improving overall employee engagement rates and stopping high turnover. Establish a strong internal communication plan for your organization, and don't forget the importance of keeping your valuable employees happy and involved.
Employee appreciation is important and constructive feedback is another important tool in your arsenal. Here's a favorite tip of mine: using Matter to encourage peer appreciation and change your company culture in a positive direction, increasing employee happiness in one easy move.
Go out of your way to create an effective employee engagement strategy centered around internal communication plans, employee advisory boards, and regular feedback sessions. Make sure you post detailed reports of recent developments on company blogs so that every worker knows what is going on beyond office walls.
The answer to all of your attrition headaches is an engaged, empowered workforce that feels valued and appreciated by their leadership. When you add in a collaborative work environment and a flexible work schedule, you’ll have created your employee’s dream job. Worries about losing top talent will be a thing of the past.
