August 17, 2022 | 6-minute read (1140 words)
Employee retention is turning out to be another major challenge faced by businesses in the post-pandemic era. Due in no small part to the Great Resignation, businesses are recognizing that recruiting new employees is expensive and time consuming versus expending the effort to retain existing employees.
In a PwC Pulse Survey, conducted Jan. 10 to Jan. 14, 2022, 77% of finance leaders said the ability to hire and retain talent is the most critical aspect of attaining growth.
Employees are much more likely to stick around if they feel valued by your business. Creating an employee engagement plan is the first step to making sure they do. If you’re struggling to keep valuable employees on board, it’s time to get serious about your retention strategy.
A good employee retention strategy is based on eight factors. They are cumulative, not discrete, meaning you can’t address a few and forget the rest.
One of the biggest contributors to turnover is poor morale. While employees with low morale feel underappreciated, neglected or overworked, outwardly they may simply appear unmotivated or unproductive. Poor morale is also strongly correlated with absenteeism.
To counter poor morale, managers must take a proactive approach and figure out the cause, then keep it from spreading. In the event there is a chronic complainer in the mix, aka a “Negative Nancy” or “Downer Dan,” research shows these negative feelings can easily be passed on to others and pervade the entire team, so it is especially important to intervene.
Regular one-on-one meetings with direct reports can help identify a shift in morale early on. Managers are the first line of defense in detecting more issues; it should not be exclusively the provenance of HR. Routine discussions with managers about job satisfaction, well-being and work-life balance — and actually following through on any action items — can go a long way toward increasing morale.
While some people might prefer to “coast,” most will end up looking for a new opportunity when they hit a dead end at work. Feelings of stagnation set in, and they fear their skills are dated and begin to lose interest altogether.
The remedy is to offer training and development programs, as well as to share a path for advancement. It’s up to the company to show employees how they can improve their skills for the benefit of the business, as well as their own career. Invest in upskilling to create a future-ready staff while simultaneously helping employees keep their skills relevant.
People are like puzzle pieces. Sometimes they connect, and sometimes they don’t. But you don’t get to choose your colleagues in the office. People usually learn to get along, at least superficially. However, managers should be educated on how to quickly and fairly manage workplace conflict in the event a more serious dispute arises.
It’s also important that managers model cordiality and professionalism to imbue positivity among staff. Research shows that the best managers tend to follow five common practices that inspire loyalty from employees. On the contrary, micromanagers can be extremely deleterious to retention efforts.
For businesses with a dedicated human resources team, HR professionals are increasingly recognizing the importance of managing workplace relationships, a process formally known as employee relationship management.
One of the most frequently overlooked aspects in the workplace is gratitude for employees. Too often, top performers are often simply assigned more work with no recognition for a job well done.
But recognition is a vital part of keeping employees from leaving for greener pastures. Businesses that prioritize staff recognition have employees who are 56% less likely to be searching for a new job, according to a Gallup-Workhuman survey.
It makes sense that employees feel valued when appreciation is periodically shown for their work, whether by colleagues or by management. A formal employee recognition plan helps affirm an employee’s value in a way that salary alone cannot.
On the other hand, when recognition is nonexistent, employees can end up feeling like cogs in a wheel, deflating morale and prompting them to look for new opportunities.
If the work atmosphere is all-consuming and dismissive of employees’ personal lives, staff are likely to vote with their feet. Giving employees some say over their work arrangements, in the form of remote work and/or flexible schedules, signals that your business recognizes the importance of work-life balance.
Employees will deeply appreciate the opportunity to manage their nonwork responsibilities and maintain work-life balance, which in turn is likely to boost their productivity on the job.
Research from SHRM, the Society for Human Resource Management, shows that roughly 50% of new hires resign during their first 18 months on the job. Surprisingly, one of the best ways to mitigate such turnover is by implementing a strong onboarding program.
A study by the Brandon Hall Group finds that businesses with a strong onboarding program not only boost productivity by 70%, but they also improve retention of new employees by 82%.
Onboarding is not a one and done process. The components of a good onboarding process begin with carefully crafting your job description and continue well beyond the first day and center on company culture. When onboarding remotely, it’s worth the effort to develop a step-by-step plan to set up new hires for success.
Employee benefits are one aspect of total compensation where employers can differentiate themselves to better hang on to their existing staff. You may pay an attractive salary, but if competitors are outshining you in terms of these intangible yet valuable extras, you may well face attrition.
The goal of offering the right mix of benefits — in addition to health insurance — is to convey to employees that you are a partner in their well-being. And your benefits should not be stagnant; they should be adapted to meet the evolving needs of employees.
Finally, the single-most important facet of your employee retention strategy is compensation. It goes without saying that paying competitive, market-level wages is fundamental. Underpaying breeds resentment and poor morale, not to mention hurts retention.
Further, the long-standing U.S. practice of shrouding employee salaries in secrecy is becoming increasingly archaic. Many states have implemented salary history bans that prohibit businesses from asking or using an applicant’s salary history. Further, more companies are adopting salary transparency as a tool to reduce gender and pay gaps and thereby boost retention. Fintech company Expensify even bases compensation on co-worker assessments.
Not every employee can be retained regardless of how much effort you expend, and there may be some who shouldn’t be retained. However, developing a retention plan that fosters a better life for your employees will pay dividends in the long run. For assistance with formulating your own people-centric retention plan, consider working with an outsourced HR service.