14 best practices for employee retention
Keeping employees, and keeping them happy, is a tall task for managers in this tight labor market, but it’s not unachievable.
If there’s one thing keeping executives and managers up at night in a tight labor market defined largely by a shortage of skilled and highly-qualified workers, it’s employee retention.
It’s obviously easier to retain a quality employee than to recruit, train, and orient a new employee with similar qualifications and experience. In addition to time, there’s a significant cost factor involved, too.
In dollar figures, the replacement cost is $15,000 per person for an employee earning a median salary of $45,000 a year, according to the Work Institute’s 2017 Retention Report. While that’s a scary figure, the study of 34,000 respondents concluded that 75 percent of the causes of employee turnover are preventable.
That’s good news because when one employee leaves, not only do you have to find a replacement for such a talented team member — no small feat at a time when skilled professionals are in high demand — but you also have to consider the impact this departure will have on the rest of your staff, notes staffing firm Robert Half.
“Whenever a co-worker walks out the door, people notice,” states a Robert Half blog. “Some might even start wondering if they should start looking for a new job, too. That’s why employee retention and job satisfaction should be high on every organization’s list of priorities, and why creating effective retention strategies to decrease turnover is one of a manager’s most important jobs.”
Ways to improve employee retention
A successful employee retention strategy requires you to think about things from the team’s point of view, explains Robert Half. No two employees are exactly alike, of course; each has unique desires and goals, but all of them want to feel appreciated by their employer and treated fairly. They want to be challenged and excited by their work, and they want to be paid at or above market rates with good benefits.
All of these concerns are important, but managers serious about retention do more than just the bare minimum. Managers should consider every area of the employer-employee relationship in developing their organization’s plan for keeping workers happy. What follows are 14 areas where strategic initiatives can boost employee retention:
1. Onboarding and orientation
Every new hire should be set up for success from the very start. Your onboarding process should teach new staff members not only about the job but also the company culture and how they can contribute and thrive. Don’t shortcut this important first step: The training and support you provide from Day One can set the tone for the employee’s entire tenure at the company.
2. Mentorship programs
Pairing a new employee with a mentor is a great component to add to your continuing onboarding process. Mentors can offer guidance and be a sounding board for newcomers, welcoming them into the company. And it’s a win-win: New team members learn the ropes from experienced employees, and, in return, new hires offer a fresh viewpoint to your mentors. Employees’ work supervisors shouldn’t double as mentors, however.
3. Employee compensation
It’s absolutely essential in this competitive labor market for companies to offer attractive compensation packages. That includes salaries, of course, but also bonuses, paid time off, health benefits, and retirement plans. Every employee should have a full understanding of the benefits they receive from your organization from the beginning.
Whether it’s paid time off for volunteering, occasional catered lunches, or free snacks and coffee every day, perks can make your workplace stand out and boost employee morale. Some companies negotiate group discounts on big-ticket purchases, from cars and homes to smartphones and home security systems.
5. Wellness offerings
Keeping employees fit, mentally, physically and financially, is just good business. Of employers polled for a Robert Half survey, 74 percent said they have mental wellness offerings of some sort, such as stress management programs. Sixty-five percent of employers offer financial wellness resources, such as retirement planning or credit counseling. And 63 percent said they provide gym access, incentives for engaging in healthy behavior or other physical wellness options.
6. Communication and feedback
Keeping open lines of communication is a formal way of describing a practice that’s essential for employee retention. Your direct reports should feel they can come to you with ideas, questions, and concerns, and they expect you to be honest and open with them about improvements they need to make in their performance. Make sure you connect with each staff member on a regular basis — don’t let performance issues build up pending the annual review.
7. Annual performance reviews
Even if you’ve met with employees throughout the year to check on their job satisfaction, never skip a regular big-picture conversation. This is when you’ll discuss short- and long-term goals and talk about their future with the company. While you should never make promises you can’t keep, you can talk through potential advancement scenarios together.
8. Training and development
Make it a priority to invest in your workers’ professional development and seek opportunities for them to grow. Some companies pay fees and travel for employees to attend conferences or industry events each year, provide tuition reimbursement, or pay for continuing education training.
9. Recognition and rewards systems
Every person wants to feel appreciated for the work they do. Make it a habit to thank your direct reports when they go the extra mile, whether it’s with a sincere email, a gift card, or an extra day off. When you show your appreciation to employees, explain how their hard work helps the organization. Some companies set up formal rewards systems that incentivize great ideas and innovation, but you can institute recognition programs even on a small team with a small budget.
10. Work-life balance
What message is your company culture sending? Be careful to avoid having a culture that encourages and rewards around-the-clock availability. Expecting staff to regularly work long hours and be at your beck and call is not conducive to employee retention. A healthy work-life balance is essential to job satisfaction, and people need to know that their managers understand they have lives outside of work. Encourage staff to take their vacation time, and if late nights are necessary to wrap up a project, see if you can offer late arrivals or an extra day off to compensate.
11. Flexible working arrangements
Some organizations allow staff to choose a compressed workweek (e.g., four 10-hour days) or flextime, where employees are on the clock, say, from 6 a.m. to 4 p.m. or 10 a.m. to 7 p.m. The ability to telecommute — and avoid sitting in traffic — one or two days a week can be a significant stress reliever and retention booster.
12. Dealing with change
Every workplace has to deal with change, and staff will look to leadership for reassurance. If your organization is going through a merger, a layoff, or another big shift, keeping your staff as informed as you can will help you manage the rumor mill. Make big announcements face to face, either individually or in a group meeting, and make sure you allow time for questions.
13. Fostering teamwork
When people work together, make sure everyone, not just your team’s stars, has a chance to contribute ideas and solutions. Further foster a culture of collaboration by accommodating individuals’ working styles and giving them the latitude to make smart decisions.
14. Acknowledge milestones large and small
Whether the team just finished a huge project under budget, or an employee celebrated a 10-year work anniversary, seize the chance to celebrate together with a shared meal or group excursion.
Final thoughts on retention
Robert Half recommends revisiting your employee retention strategy at least once a year. That includes staying current on market standards for salary and benefits and best practices in developing an attractive workplace culture and strong manager-employee relations. That’s the way to keep talented professionals happy about working for your firm.
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