How do you keep your best employees? How do you reduce labor turnover and the cost of hiring new people? What can you do to better engage your staff and keep them satisfied?
If you ask these questions, you’re definitely not alone. About 78% of business leaders consider employee retention to be important. According to Glassdoor’s 50 HR and Recruiting Statistics 2016, nearly 34% of employers are concerned that voluntary exits will increase, and 51% of employees are considering a new job.
In addition, 89% of Glassdoor users are either actively looking for jobs or would consider better opportunities, even though 57% of Glassdoor’s website visitors are employed either full-time or part-time. Based on the numbers, it’s quite possible that an employee of yours is actively job-hunting.
So it’s important to understand what it actually costs to replace that one employee. And the answer is likely more than you think. It’s a whopping $4,000! Plus, it takes an average of 52 days to fill just that one position.
You get the point: job hopping is at its highest ever and employers are struggling to keep their best hands.
So how do you engage and hold on to your best talent? Learn from the companies doing it right.
1. Create a formal employee retention strategy
Having a formal staff retention strategy in place is the first step to successfully holding on to the employees you bring into your company. No one can afford to wait until you suspect a valuable team member might leave before creating one. It will not only help you keep your staff happy and with your company – it will also help you achieve your business goals.
Your retention strategy should address new hire orientation components including onboarding and mentorship, plus details regarding company culture including employee compensation, communication around the company pay system, employee rewards systems, work-life balance, training and development, and the overall work environment.
It should also cover communication in the workplace, employee feedback, change management, teamwork in the workplace, etc.
Want to see a positive ROI on your retention programs? Put in place employee retention programs that are uniquely designed to work for your employees and are also hard to replicate. For instance, new employees at General Mills get three weeks paid vacation right from their first day at work. And Chieh Huang, CEO of Boxed, has said the company would pay the college tuition for the children of his employees.
Also ensure that your retention strategy accommodates as many individual differences as possible. This is because every employee is typically motivated by different things.
Considering that over 50% of employers polled in the Watson Wyatt survey said they had no formal strategy for employee retention, having one sets you apart and sets you up for success.
2. Your competitors don't hire just anyone, you shouldn’t either!
Google is renowned for its tough hiring process, just as it is also known to successfully retain some of its best hands. It has consistently ranked in the top five of Fortune Magazine’s “100 Best Companies to Work For” for six years.
And contrary to what many believe, Google actually has one of the best reputations for recruiting and retaining talent. But despite receiving two million applications for 5,000 positions each year, Google still headhunts many of its recruits. Talk about going the extra mile to get the best talent!
Even if you choose against headhunting like Google, it’s key to discover and implement the strategies that work best for your company. You simply cannot retain your best people if you don’t go out of your way to hire them in the first place. So you must get it right from the word go.
The Wall Street Journal estimates the cost of replacing an employee as twice his/her salary. WSJ also posits that “hiring the right people from the start…is the single best way to reduce employee turnover.” As such, “interview and vet candidates carefully, not just to ensure they have the right skills but also that they fit well with the company culture, managers and co-workers.”
To increase your staff retention rate, hire job seekers that fit best within your company. We can’t emphasize this enough.
3. Your competitors pay their staff well
Research by Glassdoor indicates that 35% of employees will quit their current jobs for a new one if they don’t get a pay raise.
A great salary package is essential to achieving a positive staff retention rate. When employees feel they are not adequately compensated monetarily, committing to the company long term becomes a difficult and less attractive option. Many times, they leave to join a company that pays better.
Whereas, companies that pay good salaries almost always record a higher employee satisfaction rating (which usually translates to better retention).
For instance, according to this survey by PayScale, a compensation software and data company, employees of Facebook have the highest job satisfaction in America: 97%. The social network pays a median salary of $135,000 to its experienced staff, third behind Google ($140,000) and Salesforce ($136,000).
While other factors certainly contributed to the high job satisfaction, a good salary definitely is a major contributor.
But what if you can’t pay big salaries? Offer your employees other amazing benefits.
A 2011 Analytic Services survey of HR leaders by the Harvard Business Review reveals that 60% considered an attractive benefits package as “very important" in recruiting and retaining employees.
In addition, MetLife found that about 49% of employees polled ranked benefits as a prominent motivator for working at a company; 60% also indicated that benefits are an important reason for staying.
4. Encourage open communication and feedback
It was Peter Drucker, business visionary, author and professor of business that said: "Employees will only complain or make suggestions three times on the average without a response. After that they conclude that if they don't keep quiet they will be thought to be troublemakers or that management doesn't care."
Creating an open work environment where employees can speak their minds freely is key to retaining your best hands. Are people comfortable offering ideas and providing feedback? Can employees express themselves without fear of embarrassment, reprisal or even losing their jobs?
In addition, does your company communicate expectations and goals clearly and directly? It’s crucial that employees know exactly what is expected of them – and that they feel heard. No employee wants to stay in a company where job requirements are not spelled out – or where it’s not clear that “The Powers that Be” are allies.
Establish robust communication channels and encourage consistent two-way communication at all levels. In addition, you can hold regular meetings and one-on-one conversations to regularly measure employee satisfaction. It’s also wise to use an employee polling tool like TINYpulse, then follow through on the feedback.
Having a strong and well-defined communication policy in place can help ensure alignment between employee values and those of the company. When you both agree with or at least understand each other, you can better work together long term.
5. Most of your competitors force their staff to conform. Don't do that!
Encourage workers to be themselves and don’t try to stifle their uniqueness. While it is important that your employees conform to company ideals, overly compelling them to live by the status quo – especially against their natural inclinations – may create problems with retention.
In a recent survey carried out by Francesca Gino, author of Let Your Workers Rebel, she determined that "nearly half the respondents reported working in organizations where they regularly feel the need to conform, and more than half said that people in their organizations do not question the status quo."
She says, “organizations consciously or unconsciously urge employees to check a good chunk of their real selves at the door. Workers and their organizations both pay a price: decreased engagement, productivity and innovation.” I’ll say you add employee dissatisfaction and decreased staff retention rates.
What to do instead? Francesca suggests six key strategies:
- Give employees opportunities to be themselves
- Encourage employees to bring out their signature strengths
- Question the status quo, and encourage employees to do the same
- Create challenging experiences
- Foster broader perspectives
- Give voice to and encourage dissenting views
By striking a balance between company ideals and individual peculiarities, and clearly defining the extent to which a deviation from the status quo is acceptable, you can effectively keep your workers happy and willing to stay.
6. Invest massively in employee education and development
"Furthering your employees' education can help them feel valued, important and invested in the company," says Dan Pickett, CEO of Nfrastructure, an infrastructure, managed services and network services firm.
Investing in extensive skills training and professional development of your employees can help you keep some of your best people. Employees typically see a company’s commitment to trainings as “an investment in their worth and therefore a powerful incentive to stay.”
To this end, staff training must never be regarded as an afterthought, but rather a necessary investment into your company’s long-term growth.
Training and development help your employees grow with your company. If you fail to provide an opportunity for them to enhance their skills and capabilities so they can perform well in their jobs, they will move to employers who have such provisions.
7. Establish a fair and strong reward system
Employees constantly need to feel appreciated and rewarded for their hard work and contributions to the company. Hence, you must establish a reward system that is perceived as fair to all. Track employees’ performance through appraisals, clarify their roles and contributions in the company, help them improve performance and results, recognize and appreciate achievements, and follow up with commensurate rewards.
In addition, while monetary rewards are cool, offering other benefits like flexible work schedules, stock options, generous paid leave options and more will solidify employee loyalty and increase retention rates.
Staff recognition needs to both authentic and effectively communicated. As the people at Select International put it, “Recognition needs to be specific: ‘Good job’ is acceptable, but ‘Good job on the Nelson project’ is better. They (employees) need to feel that their contributions to the business are important. But the feedback and praise must be sincere. Top talent is smart enough to know the difference between sincere appreciation and platitudes.”
That said, be mindful of the way you recognize and reward your employees, too. While there are good ways to do it, doing it the bad way can actually hurt your company. For instance, leaders at M.J. Management Solutions, Inc., advise against creating an ‘Employee of the Month’ program, which they claim can make other employees feel unappreciated. Instead, “a better alternative is to let the team vote each month, and call it “Colleague of the Month.”
Final words…
When employees feel appreciated and valued, they rarely want to leave. However, sometimes good employees still leave, and it is not because of what you did or didn't do. Life just happens: they get better offers, change careers, or even go on to start their own business. Leaving, sometimes, is inevitable. You can, however, make the best of the situation by keeping them on long enough to smooth transitions, learning from their exit interviews, and building your alumni network, which can prove very useful over time.
Gbenga Joseph Sogbaike is a freelance HR writer and partner at Time&Ink (www.timeandink.com), a virtual copywriting agency. Connect with Joseph on Twitter via @gbengasogbaike
