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Employee attrition costs US businesses 1 trillion dollars a year. For many businesses, the cost of replacing just one employee equals more than 24% of their annual salary. No wonder then that employee retention best practices have become the focus of HR departments across the country: it’s simply too expensive not to. Strategies to increase employee morale, decrease voluntary turnover and keep the workforce happy and engaged have the potential to make or break a company.
An effective employee retention strategy can include anything from employee development and tuition reimbursement programs to childcare to employee appreciation. They all have one common thread: they revolve around employee satisfaction. Here we'll look at six best practices that companies around the world have found effective in stemming attrition and retaining their valued employees. First, though, for a few statistics:
Statistics show that only one in four employees are satisfied with their jobs, and employee disengagement is running rampant: 64% of workers are either not engaged or actively disengaged at work. As many as 70% of employee turnover is caused by employee dissatisfaction, while employee satisfaction has the power to reduce employee turnover by up to 50%.
Of those who voluntarily left their jobs, 33% did so to get away from their manager and another 31% were looking for a better culture fit.
The tech industry has some of the lowest employee turnover rates (20%+), compared to hospitality (33%), retail (31%) and non-profit/education (30%). What is bringing those numbers down? It could be their focus on employee development, or maybe it is the flexible work schedules or potential for remote work. It could also be the perks and benefits they offer, or maybe it's that they know how to recognize their employee's contributions and do employee appreciation right. Either way, it's obvious that the tech industry is doing something right when it comes to employee retention best practices. Need help calculating employee turnover? Use our calculator to estimate turnover costs.
Here are six employee retention best practices that have been used successfully to increase employee engagement, drive up satisfaction, and bring down turnover rates in companies across the country:
Research shows that employees who feel like they belong within the culture, and enjoy getting along with colleagues and managers, stay at the company longer and perform better than those who don't. For example, not only should job postings include a description of the organizational culture, but they should also specifically ask applicants to describe how they match this culture during interviews. Be honest: Employees should be made aware of any cultural challenges upfront, and should also be given the choice to opt out if they would prefer another workplace environment. For example, a call-center employee retention strategy is to inform employees about the loudness of their work environment so that workers can decide whether or not it's right for them.
Offering employee benefits is one of the most commonly used employee retention best practices because it appeals to employees' desire for security and stability. With employee benefits, workers know that they'll be taken care of in case they experience health problems or struggle financially due to large expenses like child care. This leads to high morale and employee loyalty.
If employees are not given the tools they need to succeed, team morale will suffer. Encourage employee growth through classes, seminars, and tuition reimbursement programs. New employee training shouldn't just include technical skills but also employee development which includes less tangible skills such as communication or project management. Employees who develop their skills can more easily take on new challenges when they arise, and they will stay longer if they know there is room for professional growth within the workplace.
New employees are especially prone to feel out of place and disengaged, so it's important to give them the hand-holding they need as they start out. Employee retention best practices should be outlined before an employee is hired, as this approach will help attract and retain qualified employees and increase job satisfaction. For example, some companies offer a cash bonus for successfully passing the first 90 days of employment on top of their standard salary. This employee retention best practice incentivizes employees to adjust more quickly and encourages them to continue working hard during that time period. A smooth onboarding process and access to a full job description from the get-go is also important for retaining your new hires.
Employees who feel appreciated by their superiors are more likely to stay at the company longer, so make sure every new employee has a supervisor he or she feels comfortable talking with face-to-face or over email. Feedback loops between employees and managers should be offered on a regular basis, not just during the employee's annual review. This is important for keeping your retention rate out. The more supervisors and executives talk to their employees and show interest in what they're doing (and how they can do it better), the less those employees will feel as if management is out of touch with what goes on at work every day.
A new employee retention best practice that has been gaining steam is employee engagement - making sure that workers have a sense of purpose within the company as well as giving them ample opportunities to develop skills they can apply throughout their career so they don't get bored or plateau early on. For example, new hires should have access to planned networking events, mentoring programs or workshops so they feel like they belong and can build relationships with coworkers. An engaged employee is one who sticks with the company, and also one who is productive, creative, and a great contributor to company culture.
While all employee retention best practices are important, recognition for employee contributions has the biggest impact on employee satisfaction and can therefore be called an important factor in employee retention - one that makes it easier for an organization to keep its teams happy. When possible, an employer should find ways to provide public recognition because recent research shows that employees who are recognized privately are more likely to leave the company within 12 months due to lack of visibility. To lower your turnover rate, what you need to do is shout out that employee recognition! For example, company-wide emails recognizing a good employee who has excelled during project milestones can motivate other members on the team while encouraging them with tangible evidence of their contributions at the workplace over time.
To find examples of these employee retention best practices in action all you need to do is look at examples of companies who are succeeding in keeping their workforce loyal and their turnover rates low. For, instance Bank of America offers its employees a variety of employee benefits including adoption assistance, discounted mortgage rates and tuition reimbursement programs. This gives current employees peace of mind while also making their job more attractive to potential hires who are looking for perks like these.
For an example of a company providing in-house career growth and training, take Google. Google offers a broad range of courses (ranging from topics like cooking or public speaking to more employee-specific MBA degrees) for employees looking to learn new skills without taking classes outside the company. It also offers employee development programs dedicated to training managers in how to be successful leaders.
One company that runs an especially effective employee appreciation program is Southwest Airlines, which has one of the lowest employee turnover rates in the country. Southwest recognizes employee contributions by highlighting those efforts through employee-of-the-month awards and providing employee discounts and participation in employee stock option programs. These programs are designed to keep employee satisfaction high while also keeping employee retention best practices at the forefront of their employee development strategies.
As you work to implement employee retention techniques don't forget the goal you're working for, and keep the focus on your talented employees. Your employee retention policy will be exactly as effective as you are successful in meeting the felt needs of your workforce. So don't forget to listen to employee feedback, and work on creating an open, transparent company culture where everyone feels free to speak their mind. Feedback apps like Matter can help create a culture of feedback where employees give and receive kudos, helpful pointers, and constructive feedback from peers and managers alike. Just the simple introduction of this software can be revolutionary in improving the employee experience and giving life to your company culture.
Once you've got your finger on the pulse of your teams, start implementing best practices! From providing recognition for employee contributions or implementing company-wide networking events, these employee retention strategies will help you retain your most valuable resource: people! Which employee retention best practice do you plan on implementing first?