During the past year and a half of frantic revamping to meet the unprecedented challenges caused by the pandemic, businesses were more focused on surviving. Employee retention strategies during this time were not prioritized.
The employee retention program that worked before may not cut it now. Or maybe your company was struggling to improve employee retention techniques before the pandemic hit and you are desperate to improve your employee retention rate. There’s a general consensus that the pandemic has changed the way companies will operate from here on out, and that we need to revisit our employee retention ideas.
The Benefits of Employee Retention
You could define employee retention as “a way to keep employees happy so they don’t quit,” and it has a powerful impact on the company’s bottom line. Basically, workers who are happy don’t leave. So the question is what makes them happy? Experience has shown that salary and insurance benefits are important, but an employee retention policy based solely on those two things is not going to be effective. Studies have shown that if someone doesn’t feel respected and appreciated, salary alone will not keep them there—and if it does, they will not be as productive.
8 Top Tips for Employee Retention
All employee retention techniques really boil down to just one thing: employees want to know you care about them. Gallup research has shown that fifty-two percent of voluntarily exiting employees say their manager or organization could have done something to prevent their departure, but in the three months before their exit they were never asked by their manager or other leader how they felt about their job. In other words, nobody seemed to care if they were happy or not.
So how do you show employees that you really do care about them? First, realize that you have to actually know them in order to care about them. To know someone requires that you spend actual face to face time with them. Not only do you need to spend some time with them—in the office or on Zoom—you need to express an interest in them as a person who has a life beyond the company. Also, when you care about someone, you will treat them with respect and kindness. Old school management by intimidation is so not the way to improve employee retention. The best employee retention programs examples show respect and kindness to be major factors in creating a corporate culture that attracts top talent and keeps it.
1. Onboarding Plan
Mindful onboarding is the foundation for any employee retention program. Studies have shown that around 20% of new hires leave within their first 45 days of employment. Some of which could be attributed to poor hiring and retention practices. So hiring the right people for the job at hand goes without saying. So assuming you’ve hired someone who’s right for the job, studies have shown that companies with strong onboarding programs end up with happier, more productive employees—who stick around. The purpose of onboarding is to get your new hire up to speed and make sure they:
- Understand the company’s mission and culture
- Begins developing relationships with their manager and team
- Understands their job and their role on the team and within the company
- Clearly understands performance criteria and expectations
Onboarding is a process and it takes more than one day or one month. Many companies have developed at least a 90-day onboarding process, and still others adhere to a plan they call “continuous onboarding.” We call it effective employee retention strategies.
One of the most fun aspects of onboarding programs is providing new hires with a collection of branded company swag. There’s nothing a bunch of cool free stuff to say “welcome aboard!” A company like Gemnote can help you curate a collection of customized items that reflect the ethos of your company, and even drop ship it to your new hire at home to welcome them before they come aboard.
2. Competitive Benefits/Salaries
We could have put this first since so much of the job offer hinges on this. To be competitive in the marketplace and attract key talent, you’re obviously going to need to provide salaries that make it possible for someone to eventually purchase a home, take time off and go on regular vacations, etc. In addition, fringe benefits you offer in the way of medical, dental and vision insurance, wellness programs, flexible hours, and paid time off can make a huge difference. 401k plans have become standard, and stock benefits can be an extra incentive for top execs. But while the $$ might get them in the door, there are many other factors that affect whether new hires will stay. It’s important not to get tunnel vision when it comes to a key talent’s sign-on salary. As part of your key employee retention plan, make sure you keep salaries for those key positions competitive within the marketplace. Otherwise, instead of asking for a raise, a key performer who’s feeling under-appreciated might be lured away by a better salary offer. Also, don’t forget to revisit and highlight the dollar value of an employee’s fringe benefits—often called the “hidden paycheck”—at least once a year, so they can appreciate the full scope and value of their compensation.
3. Up-to-date Equipment and Environment
Often overlooked when evaluating an employee retention plan is the importance of providing a pleasant physical workspace for employees. According to research, doing so boosts a company’s ability to attract and keep top-quality personnel, strengthens interpersonal work relationships, and enhances employee productivity. Nothing says “I don’t care” more than not providing employees the environment and the tools they need to do their job well. In particular, a big complaint at companies is out-of-date hardware and software, which makes it much harder for staff to be efficient and productive. It’s a real lose-lose for everyone involved, especially since the cost (an not just the cost in terms of money) of replacing a valued staffer is usually much more than the investment required for the tools they need.
4. Professional Development Opportunities
If you’re not able to promote from within as your company grows, then you’re probably not providing professional development opportunities. Professional development is a key component of what is sometimes called “continuous onboarding” and is high on the list when you look at employee retention best practices. It means working together with key talent to develop a career path within the organization and then providing opportunities for them to hone their skills and achieve higher levels of contribution. It’s been proven that leaders developed within a company are much more likely to succeed than anyone brought in from outside because they are already up to speed—they know the organization culture, the various team dynamics, what’s expected, what’s not worked in the past, etc.
5. Two-way Communication
We hear a lot about communication being important, but too often forget that it’s not a one-way street from management to the workers. True transparency in communication to employees demonstrates caring and respect, and in turn builds trust and confidence. This is especially true for millennials, who will make up three-quarters of the global workforce by 2025. A successful communication strategy also needs to include inviting feedback and thoughtfully responding to it. Gen Xers (born 1965-1980) especially desire feedback and want to feel like The flow of information needs to be frequent, as well, so that everyone feels “in the know” and valued as a part of the team.
6. Flexible Work Schedules, Work/Life Balance
Perhaps one benefit we gained from our pandemic experience is that employees can be quite productive working from home. In fact, a Stanford Research study shows that employees who work from home have 50% less turnover. And it does appear that more companies are allowing some employees to continue working from home even as the pandemic restrictions ease up. Flexibility and genuine support for work/life balance are especially important to millennials and Gen Xers who make up more than half of the workforce today. Schedules based on the workaholic tendencies of boomers are not going to help you retain your rising stars. But for any staffer who has logged hours of overtime to complete an important project, giving them paid time off can not only restore balance but is a great way to say “thanks for going the extra mile.”
7. Recognition and Appreciation
It’s a fact that people need to feel valued by others and feel like they are making a contribution. Employees who don’t feel appreciated are much more likely to quit their jobs. Of course, employees need both positive and negative feedback (constructive advice) to do their best. A study on Harvard Business Review shows that the ideal ratio between positive and negative suggestions is about six positive to one corrective. Good managers make a habit of recognizing and celebrating their team’s notable achievements both privately and publicly on a regular basis. Sparse feedback—or worse, once-a-year feedback during a performance evaluation—is not going to make anyone feel appreciated or motivated. But empty praise isn’t either. It’s important to be as specific as possible with praise or it might not be perceived as authentic.
Celebrating employee achievements and milestones—both personal and professional—is always a good idea and well worth the investment of time and money. Throw a party. Give a gift. Gemnote can help you curate a collection of unique customized corporate gifts for work anniversaries, birthdays, achievement awards and more.
According to many sources, the number one reason people leave a job is due to a poor relationship with their boss. And not necessarily because the relationship is acrimonious. Benign neglect leaves employees feeling unimportant and under-appreciated. So often high performers get promoted for job skills that don’t include being equipped to manage a team, and yet one of the key aspects of being a good boss is knowing how to coach and mentor employees.
Beyond the mentorship of a manager, though, many organizations have established a structured mentoring program to facilitate the effective onboarding of new hires, foster continued guidance and skill enhancement of all staffers, and groom prospective managers for leadership. Mentoring programs have been shown to not only improve professional development within companies, they also boost job satisfaction and employee retention in the workplace.
The Importance of Employee Retention
According to Gallup research, the cost to replace an employee is estimated to be at least one-half to two times their annual salary. But, employee turnover is costly to an organization in more ways than just $$—and all end up negatively impacting the organization’s bottom line. There’s the cost of finding, hiring and training a new person—who may or may not work out. There could be a loss of important clients. For sure there’s a loss of productivity until the empty spot is filled, even with other coworkers trying to take up the slack. Moreover, there’s the productivity-busting stress experienced by those taking on extra duties, plus the overall dip in morale that typically follows the exit of a valued employee—suddenly coworkers wonder if they should leave too.
As companies move forward post-pandemic it’s critical to address the mix of generations in our workforce and what motivates each as we seek to develop creative ways to retain employees.
Some organizations have up to five generations working side by side—from traditionalists on the verge of retirement, to Gen Zers fresh out of college. A report sponsored by the Workday company showed that the rise of millennial employees into leadership roles and the entrance of Generation Z into the workforce are two of the biggest contributors to changes in traditional approaches to leadership, learning, and workplace culture.
Innovative employee retention strategies will be required to address the mix of motivations, perceptions and working preferences. Within the mix also lies a great opportunity for the different generations to learn from one another and discover new ways of approaching their jobs that brings them even greater satisfaction and has a positive impact on the organization’s bottom line. There might be some trial and error to determine what works best for your company, but as long as respect and kindness are the foundation of your workplace culture, your employee retention should improve.