Employee loyalty is a powerful commodity for companies. It allows businesses to retain their top talent, leading to greater productivity, positive company culture, and overall business growth.
However, many organizations struggle to keep their top employees. In fact, a startling 73% of employees stated that they were open to new career opportunities, and 33% said they are actively looking for a new job.
While 87% of human resource leaders identified employee retention as their top priority, many are too distracted with other responsibilities. This has resulted in what experts have coined “the quitting economy,” where companies treat their employees as temporary workers, so their workers act like it.
It doesn’t have to be this way, though. Some of the most successful companies have found ways to keep their employees happy and engaged for the long run. Here is how to retain employees for a stronger and more profitable business.
Why Retention Rates Matter for Your Business
One of the largest expenses for most organizations is their workforce. To get the most out of your investment, it pays to have your employees stick around for the long haul.
Replacing employees can be an expensive undertaking. It costs 33% of an employee’s annual salary to recruit and hire a new employee. Depending on the level of expertise of the role, these costs can be even higher. However, as most leaders could attest, turnover affects more than the company’s bottom line. It can damage morale and lead to a negative work culture, which can end up costing a company dearly.
Organizations with high employee retention rates enjoy, on the other hand, a more positive work environment. Employees have the chance to make more relationships, which is correlated with higher levels of work happiness.
More experienced employees are also more productive. It takes new employees anywhere from one to two years on average to reach full productivity. Companies with more productive employees enjoy a stronger business than those who are continually trying to bring new employees up to speed.
9 Steps to Retaining Your Employees
The good news is that there is a lot that companies can do to avoid unnecessary turnover at their company. Employers can prevent about 77% of turnover, according to a report published by the Work Institute. By taking the right steps in your organization, you can create a happier and more profitable business that your employees will be glad to stay with and grow.
Here are the top nine steps your company can take to retain employees:
#1: Start with Onboarding
One of the most memorable days at any company is the first one on the job. It is where businesses can impact what their workers can expect and provide them with the resources and enthusiasm they need to succeed.
Companies that make a solid first impression will be more likely to have happier employees in the long run. That is why companies with a robust onboarding process increase new hire retention by 82%.
Some tips for a robust onboarding process:
- Have employees sign paperwork before they start. That way, their first day can be exciting and eventful, not filled with paperwork.
- Customize your onboarding process according to their position and level of experience. Provide useful information, not boring general material.
- Onboarding should be more than one day. Create clear goals for learning and performance for 30, 60, and 90 days on the new job.
- Use self-paced learning tools so that employees are neither overwhelmed nor bored.
- Pair employees with more experienced mentors. They can be a valuable resource to provide information and help that may not be in training.
With the right onboarding process, you can encourage employees to stay.
#2: Invest in Professional Development
Provide your workers with ongoing training and professional development. It will not only make them better and more effective workers but also help improve your employee retention. In fact, a study by Consumer Technology Association found that high-skills training and professional development were among the top benefits for retaining employees over the next five years.
Your employees want to grow. In fact, ongoing training is strongly associated with worker satisfaction. In LinkedIn’s 2018 Workplace Learning Report, 93% of those surveyed stated that they would stay at a company invested in their career. The newest generation of workers no longer want to stay in the same place. Instead, they want to be growing in their positions. In a survey of millennial workers, 71% of those who were likely to leave their organization stated that they were dissatisfied with how the company neglected their leadership skills.
Invest in additional job training for your employees. Allow them opportunities to develop their leadership skills and take the initiative in your company.
#3: Offer Competitive Pay
Let’s face it: your employees are not working for you out of the goodness of their hearts. They have bills to pay and life goals. With the rise of websites like Glassdoor, it’s easier than ever for employees to find out what workers are being paid at other companies. If your wages are not keeping up, your workers will leave you for them.
While it is not the only reason that employees leave, pay is a significant factor. A survey from Glassdoor found that 45% of employees who recently quit their job cited pay as the top reason. Another Gallup survey also found that 44% of employees would take a job at a different company for a raise of 20% or less.
Take time to research the average pay scale for each position at your company. If you find that you cannot offer a competitive salary, offer incentives in other ways. For example, you can offer more paid time off or vacation days to make up for the lower wage.
#4: Offer the Right Benefits
Perks and benefits are a way to both attract top talent and keep current employees invested in your company. In one survey, 78% of employees stated that they were more likely to stay with an employer because of benefits.
However, the right benefits are critical to your retention rates. Research has found that specific perks are more attractive to employees. The top benefit? Health insurance. According to an employee survey by MetLife, it was the most important benefit to employees.
401(k) and retirement plans are also a critical way to encourage loyalty. In the same Metlife survey, four in ten employees said their retirement benefits were a significant reason to stay with their company.
The flexibility to work from home is another substantial benefit for employees. As the world returns to the office after the pandemic, companies that retain flexible policies may find their employees more willing to stay. According to Microsoft’s first annual Work Trends Index, 73% of workers stated that they wanted more flexible remote work options even when it is safe to return to work.
Companies that choose the right benefits that support their worker’s well-being will be rewarded with higher retention rates.
#5: Openly Praise and Reward Employees
Have a system for openly praising and rewarding employees for a job well done. This does not necessarily need to be monetary compensation. Providing a rewarding experience will also help improve retention rates. In fact, 77% of companies that focus on their employee experience enjoy an increase in retention, according to LinkedIn’s 2020 Global Talent Trends.
Provide public recognition for a job well done. This could be at meetings, over group emails, or on a Slack channel. Other non-monetary rewards could include lunches with the boss or handwritten notes. These are all effective ways to retain employees: workers whose managers consistently recognize good work are five times more likely to stay.
#6: Give Your Workers a Voice
Everyone wants to know their opinion matters. Giving your employees the chance to weigh in on their position, and the company will feel more valued. It also provides leadership the opportunity to make more effective changes that could make everyone happier.
Yearly check-ins, however, are not enough to keep your workers happy. In fact, 77% of employees surveyed stated that they wanted to provide feedback more than once a year. Regular opportunities for feedback will encourage employees to engage and invest in your company.
#7: Provide Opportunities for Advancement
Continually being passed over for advancement in favor of a new hire can be disheartening for your employees. Like ongoing training, providing opportunities for promotion and growth is a powerful incentive for your employees to stay with your company.
One of the best ways to encourage retention is by promoting from within your organization. According to a study of over 5,000 job transitions, employees who stay longer at the same job without a title change are significantly more likely to leave.
If your employees can’t get a better position at your company, they will find it elsewhere. Plus, promoting from within offers many additional benefits: it’s cost-effective, ensures that the employee is a company fit, and is lower risk. Companies that reward employees with a promotion will find that their morale and company culture improve as well as increase retention rates.
#8: Encourage Work-Life Balance
Employers that are generous with their time off and pace their workflow will find that workers are happy to stay with them. While you should expect high-quality work, you should not have your employees under pressure 100% of the time.
Workers who consistently stay late and come in on weekends are at high risk of burnout, contributing to churn. In one survey, 46% of HR leaders attributed up to half of their turnover to burnout. If your employees are tired, overstressed, and missing their loved ones, they will be anxious to find a job that will encourage them to have a life outside of work.
Provide your employees with enough time for sick days, vacations, family leave, etc. Also, encourage workers to leave at the end of the day and take weekends off to stave off burnout. If your workers have to work overtime during a busy season or to meet a deadline, be sure to make up for it with generous time off when things slow down.
#9: Don’t Neglect the Exit Interview
Every company has different aspects that they need to work on to improve their retention rates. You don’t want to be giving more and more time off when it’s actually a lack of recognition that is driving your best employees away. The exit interview is a great chance to pinpoint exactly where you need to make changes.
It can be painful to lose your top talent but figuring out exactly why they left is vital to increasing retention. The exit interview is a valuable opportunity to get feedback about your company. Former workers are no longer scared of backlash, so they will be extremely honest with what they liked and what needs to be improved.
Some tips for the best exit interview include:
- Consider using a third party to eliminate bias.
- Perform the interview after the employee has left the company for the most objective feedback.
- Ask open-ended questions to get the most valuable answers.
Done correctly, the right exit interview will improve your efforts to keep your workers happy and engaged.
Grow Your Workforce with Higher Retention
If you seem to have endless “job hoppers” that leave almost as soon as they are trained, it might be time to look at your retention strategy. Companies that invest and listen to their workers are more likely to be rewarded with a loyal and productive workforce. Give some of these tips a try today to improve your retention rates!
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Originally published at upstack.co on May 19, 2021, by Samantha Dewitt.
