Your employees are your most important business asset; they drive your sales and your customer satisfaction. Though you may understand that the loss of a valued employee will have a detrimental effect, it is still often not managed correctly.
We place so much emphasis on hiring and training employees, but it is equally important to focus on employee retention. Employee turnover is a significant problem, but there are ways to avoid it so you can build a strong cohesive team.
Why employee retention matters
In a recent survey by Survey Monkey, they found that 51% of employees would take another job if offered. The Wall Street Journal estimates that it costs more than twice the amount of an employee’s salary to find and train a replacement. And according to Investopedia, it takes 6.2 months to have a new employee trained up to a base level of the employee they replaced.
If half of your current employees are open to leaving, it will cost you twice their salary to refill their roles. It will then take you six months to those replacements satisfactorily trained.
Take a moment to reflect on the effects this will have on your company each time it happens.
That thought alone should be enough to help you focus on employee retention.
Departing employees have a knock-on effect
We have all, at one time or another, worked at a company where resignation fever swept through the ranks. One good, hard-working employee resigns, and three more follow in short succession. While the influence of resignation fever is generally short-lived, it does leave a lingering impression of the need to move on to ‘greener pastures’ for those left behind.
There is nothing you can do to force a great employee to stay – but you can do everything in your power to prevent them from leaving.
1. Hire the right employees in the first place
Ensure they have the right skills for the role and know where further training will be needed. Supporting new employees through comprehensive training will ensure they have a great base to excel from.
It is not enough to just hire for technical ability. Roughly 60% of people leave their company because of the people they work with, not because of the job they are doing. You must hire employees that are a cultural fit, as well as fit well with managers and co-workers. Hire employees who will contribute to your organisation’s success in the long term.
2. Pay above-standard
If you are looking to hire the best, you need to pay them what they are worth. Work with your HR team to make sure that you have up-to-date market rates. You don’t need to be paying ridiculous salaries to employees, but paying at or below market rate will make employees feel undervalued.
Provide meaningful annual raises by reviewing your compensation and benefits to make sure you are staying competitive. Reach out to your recruitment agency if you need additional details. Your recruiters are working with a variety of companies and candidates daily. They have more insider information than you may think.
Salaries and rates of pay are often treated as a “dirty little secret” within organisations. Whether you like it or not, your employees are talking to each other about pay even if you think they aren’t. Be consistent with compensation, and when exceptions are made have firm, documented, reasons why. Don’t let unconscious bias get in the way of your reasoning.
3. Let benefits give you a competitive edge
Get creative with benefits. Look at telecommuting, flex-time, stock options, additional vacation time, or other non-financial rewards if you are unable to match the salaries that the competition offers. It is these types of considerations that may sway someone to accept your offer over more money.
4. Provide growth opportunities
Promote from within as often as your employee’s skills will allow. Make every position available internally before looking are external candidates. Make sure that all your employees know about available opportunities too. Don’t assume that everyone knows to look at your obscure internal job board – tell them about it.
Once employees see that there is opportunity to advance, they will know their hard work pays off at the company they are in. They will be less likely to look elsewhere.
Don’t forget that not everyone wants to be a CEO. Recognise those that love their roles and the work they do. Don’t just promote them to a new position they will be unsuitable for and unhappy in.
5. Offer options to work from home
The opportunity for working from home is often underrated, yet highly sought after by all levels of employees. Recent changes in the world have shown us that our employees can do so without detrimentally impacting everyday business.
This option may look different for different employees. It may be 50/50 split office and home, or a flexible schedule to enable better cross-timezone collaborative. Whatever it looks like, you will need to work with employees to ensure work-life balance while they are working from home.
5. Never stop learning
Give employees opportunities to continue their education. Provide tuition for classes and conferences, or access to online training portals like LinkedIn Learning or Skillshare. Give them challenging and stimulating work. Share your career development plans so that you are working together on their goals and passions.
6. Recognise good work
Being a good employee is hard work. While a bonus or salary increase is nice, you need to make sure recognition happens year’ round. Follow up with employees to say “thank you” or “congratulations” for a job well done. It is a small act with considerable significance that goes a long way to creating loyalty and goodwill.
Make your recognition specific. Avoid saying a simple “Nice job”. Instead, try saying “Excellent work on the final report for the Cooper Project”. It shows that you have paid specific attention to that employee’s contribution within a team. Make sure it is truthful and sincere.
If you aren’t able to praise an employee’s work, recognise where they may need assistance. Provide constructive feedback and work together on improvements. As those improvements happen, show your appreciation and respect for the hard work they are putting in to make a change. You may be surprised by what other improvements these actions make throughout your company.
7. Check-in regularly
Check-in with your employees quarterly. Don’t wait for annual reviews. You need to start meeting one-on-one in a less formal environment. This is the only way you can truly become aware of areas of concern, frustration, or what they need to get their job done.
Have open, honest discussions and be willing to listen to what you are told. Then make changes, and get feedback on those changes. Otherwise, no one will voice their opinion to you again. That is the only way you can learn, make improvements, and keep your top employees.
8. Find out what went wrong
Don’t ever underestimate the power of exit interviews. If you are losing a good employee, you want to discover what caused them to leave so you can prevent it from happening again.
You will find that employees are more willing to be open and honest when they are leaving. While they may have hesitated for fear of repercussions, once they have officially resigned, that fear is no longer there. Exit interviews bring your attention to bigger problems and issues that need attention within a team.
Keep your focus
No matter if you are a multibillion-dollar corporation, or a small business, employee retention should always be top of mind. You should take it as seriously as your recruitment efforts.
The absence of a good employee is felt both financially and culturally. Whatever you do, don’t ignore any employees that don’t complain. Just because they haven’t said anything, doesn’t mean they aren’t frustrated and thinking of leaving.
Our team always loves helping clients find qualified candidates that are a good fit and will be long term assets to their company. Let’s work together to make your company the success it should be. Connect with one of us today!