Persistent turnover is one of the crucial challenges that organizations face. It hampers productivity to a significant extent. An existing employee’s productivity is twice that of a new hire. New employees, on average, require at least a year or two to reach the same level.
This is why companies need to create robust employee retention strategies. They save their organization from loss of productivity. Engaged employees have proven to build more profitable customer relationships while coalescing teams are more productive.
Keep reading to learn about employee retention and 10 exemplary strategies.
What is an employee retention program?
An employee retention program refers to the process and strategies that a company develops to retain top talent. Moreover, the program aims to mitigate turnover risks, a leading challenge for HR teams worldwide.
When an organization's employee turnover is high, it creates considerable additional expenses while decreasing its profit and growth.
Examples of Successful Employee Retention Strategies
Create a people-first workplace
We are living in an age of tough industry competition. Hence, running a business is a very unpredictable and complex process. While traditional wisdom would urge an employer to prioritize products and profits, it is more necessary to prioritize serving people.
These include your customers, the community at large, and the employees. It would help to shift the company's perspective from "How to succeed?" to "How can our employees benefit more?"
Quantum Workplace has a great video on how to build a people-first culture by focusing on your managers.
Pay competitive rates
One of the leading reasons behind employees quitting is better prospects. Who would choose to stay with a company that pays them less than the industry's competitive rates? Companies that wish to retain employees can begin offering competitive compensation.
It would boost their morale and motivate them to work better. A good way to start is by including salary ranges in job descriptions. This would help applicants weigh their compatibility with a company. If they find the salary offering attractive, they will proceed to apply. Although this is a strategy for attracting prospective employees, transparency shows existing employees that you’re not trying to hide anything.
Create career advancement opportunities
When employees find their growth has been stagnant for too long, they look for more inspiring and growth-promising work opportunities—those who prioritize career advancement as much as good pay will want to progress in their workplaces.
Hence, companies can entice them with more challenging and improved opportunities within the organization. An upgrade after a certain period, based on an assessment of performance, would go a long way in employee satisfaction.
Additionally, help employees explore potential new paths within the company. Job shadowing is a great way to give employees an introduction to another team member’s role that they may be interested in pursuing. When employees see opportunities to grow internally, they won’t look externally.
Make meaningful connections at work
Company hierarchies will always be a part of the organizational structure, but a better connection with workers can be a step forward. Executive and HR departments can play an active role by fostering healthier connections between workers and team members.
A good rapport and friendlier work environment would enhance encouragement, contentment, and satisfaction among employees.
Recognize and appreciate their hard work
When organizations fail to acknowledge the vital contributions of employees, they cause them to get discouraged, which can be the precursor to quitting. Managers can increase the commitment and dedication of employees by timely recognition and appreciation of their hard work.
Employee spotlights are a specific way that managers can recognize employees. By publicly acknowledging the great work of team members, those employees feel valued, motivated, and more devoted to the organization’s success.
Even if monetary bonuses are not possible for every good performance, companies can find other ways to praise their hardworking employees. In a separate article, we’ve detailed several examples of ways to recognize employees.
Set up mentorship and training programs
How good is your training program?
It’s something for you to invest in so that newbies won’t have difficulty catching up and doing a great job.
Mentorship and training programs can come in handy for training new workers while also making tenured ones feel empowered to share their knowledge and skills with someone new.
Creating a mentoring program is essential to ensuring that new workers can learn quickly and have resources to study. It also makes the mentor’s job lighter and easier. So, it’s really for everyone’s advantage.
Don’t forget to add employee upskilling programs and refresher training for tenured employees.
Encourage a healthy work-life balance
Overworked employees fail to be productive at a point. When their bodies and minds have worn out, they can fall prey to stress and subsequent sicknesses. At a point, they may quit simply because the work has become over-demanding, and they find no time for personal betterment.
Google and other famous organizations have constructed impressive offices featuring colorful workstations, game centers, and cafeterias. Frequent well-being offerings, like spa retreats, free movie tickets, or gift certificates, can improve employees' work-life balance.
In another article, we outline 10 ways leaders can promote workplace wellbeing.
Provide personalized employee support
Every company employee is different, including their work pace and abilities. Hence, managerial and HR teams should provide personalized support to employees to ensure everyone feels special, appreciated, and supported in the company.
At the same time, company heads must refrain from being too hard on workers who lag in performance. Individualized counselling sessions can ensure every employee feels uplifted.
Offer flexible work arrangements
The pandemic proved that productivity doesn’t require an office. Companies discovered that workers could adapt and remain productive, even when working from home.
While this may not apply to all kinds of workplaces, companies can be flexible in their work arrangements if it is necessary for employee retention. SHRM found in a survey that the number one reason people sought flexible work was to achieve work life balance.
Learn from turnover issues
Many companies have adopted the practice of interviewing employees when they resign. They do so to understand the roots of their turnover issues.
You can learn from exiting employees the leading causes of resignations and use the information to improve the company's workflow, benefits, compensation structure, and work-life balance. It would also help companies craft more effective retention strategies.
Is it necessary to have a retention program? What are the benefits?
Every employee is an investment in a company. They spend time and a budget cultivating the skills and training their recruits. When companies hire and train employees, they dig into their profit margin.
Moreover, the recruiting competition is quite fierce in the industries right now. Hence, companies must have a well-crafted retention program to retain their valuable employees.
After all, it makes sense from a business viewpoint to retain those they’ve recruited, taken onboard, and spent time and money to train.
The primary disadvantages of not having an employee retention include:
- Cost of turnover - recruitment costs, including job advertising, time for writing and posting job descriptions, interviewing candidates, and training them.
- Loss of organizational knowledge - the resignation of top talent and knowledgeable employees from the organization. The organizational loss could lead to a shortage of talent and skills.
- Training new hire takes time - companies have to invest a considerable amount of time into training the new hires and cultivating their skills to boost performance.
- High turnover rates strain company culture - high turnover puts the company in a bad light, convincing others that it's not a good place to work. High turnovers imply lower employee satisfaction, with no loyal talents to advocate for the company.
By constructing effective employee retention strategies, here are several benefits a company can enjoy:
- Saves the organization thousands in training and recruiting costs.
- Maintain company culture with existing employees.
- Train up future leaders internally rather than looking externally.
- Outline clear paths to promotion for employees.
Now that we’ve looked at the benefits of a retention strategy let’s look at why employees leave.
Why employees leave
High turnover rates are likely a sign of low employee satisfaction in a company. Companies should investigate why employees leave to mitigate the resulting challenges and maintain a productive workflow.
Some of the most common reasons are as follows:
- Salary is not high enough - employees who feel underpaid for their work look for better prospects in other organizations.
- Overwhelmed with work and feeling unqualified to complete it - the job responsibilities become different with time. What started as a meaningful job may feel overwhelming later, requiring tasks an employee is not trained to fulfill.
- The work is not aligned with values or long-term goals - employees may feel that their jobs no longer align with the company's mission statement and are not serving long-term progress goals.
- They are not engaged with the day-to-day work - the job may have started as an exciting opportunity but feels less uninspiring day by day. A lack of engagement daily can diminish an employee's passion and enthusiasm.
- Conflict with coworkers or managers - when employees suffer indignities with managers or coworkers daily, it can adversely affect their productivity and make them leave.
- Macroeconomic trends pressing on employee - recessions can cause revenues, income, and GDP to decline, resulting in lower pay, frozen bonuses, etc.
- Demanding issues or obligations in their personal life pull them away from work - family illness such as a partner or child suffering from a disease, transfer of partners to another city, or other personal life challenges.
- They don't align with the company culture or feel they fit in eventually - an employee may feel that they do not sync with the company's mission statement, goals, and culture. They may stand at odds with the managers, trying to fit in an environment they cannot adjust to
Factors that lead to retention
The Bureau of Labor Statistics ran a survey in 2022, which showed a record-breaking 4.3 million employees quit their jobs, leaving HR teams and organizations grappling with the after-effects.
Workforce Logiq put together a report to explain the factors that keep employees around.
- Positive company cultures and cooperative working environments make employees feel comfortable, a suitable fit for the organization, and more confident.
- Positive reinforcement and work acknowledgments make employees feel valued. Workplaces that hear and acknowledge employees retain them better.
- Competitive benefits work like a charm in making employees stay and motivating them continuously.
- Employees seek continuous growth, and companies that offer ongoing training opportunities remain with their companies for a long time.
- Employees spend a major portion of their lives at their workplaces. Hence, they naturally want to feel content that their work aligns with the company's mission statement, goals, and culture.
High turnover rates can cause profit and productivity loss in significant ways. When companies recruit new hires, they invest time and money in training and refining the employee's skills. But turnover rates can damage the investment in various ways, ultimately leading to a bad company reputation and deteriorating profit margins.
With robust and effective employee retention programs and strategies, companies can effectively mitigate these challenges and retain their top talents.