Picture this: Your company is growing 20-30% YoY. The sales projections are higher than earlier predicted. The marketing team is running successful campaigns. The departments are firing on all cylinders. Company Momentum is on top speed. It feels like, “nothing in the world can stop us 💪“.
Then boom! A key player, who drives an arm of this momentum, sends in a resignation letter. To an HR Manager, this can feel like a train wreck.
Employee retention has a huge effect on company growth and success. Regardless of the position, every employee is important – from the person at the reception desk, to the executive management. Employee retention should be one of your top goals, even if your current workforce isn’t filled with ‘geniuses’.
In this post, you’ll learn what employee retention is and its benefits. You’ll also learn strategies that will make the workforce love the work they do, and feel like they’re exactly where they’re meant.
What is Employee Retention?
Employee retention is an organization’s intentional effort to keep, retain, and sustain its employees. It is the ability of an employer to create an environment that supports the needs of existing employees so that they can continue to be part of an organization.
Why should my organization care about employee retention?
According to Gallup, replacing an employee can cost anywhere from 50 % to 200 % of their annual salary. Here are five benefits of implementing employee retention strategies:
1. Reduces Cost:
High employee turnover is expensive. The costs of advertising the job opening, interviewing, screening candidates, onboarding, and training new hires can be disheartening. Retaining talent becomes easy with an effective retention strategy.
2. Improves Employee Morale & Satisfaction
Aside from a massive cost reduction, effective retention strategies boost morale and job satisfaction.
When employee morale is high, the workplace becomes more positive. Its also spurs greater interpersonal connection, which rubs off on other employees in the workplace.
3. Increases Productivity
One of the problems turnover causes organizations is sluggish productivity. It takes time for a new hire to get up to speed and be able to perform tasks as quickly and skillfully as the person they replaced.
Effective employee retention can save an organization from productivity losses. High-retention workplaces tend to employ more engaged workers who, in turn, get more done.
4. Promotes Better Organisational Culture
Other employees begin to question their loyalty to the organization when they see colleagues leaving.
When you create good employee retention strategies, employees feel more connected to their work, their team, and your company culture, thereby promoting positivity across the organization.
5. Increases Revenue
One of the less-known benefits of employee retention is that it affects business revenue. And no, not just in recruitment costs…
Engaged employees who feel they have a solid career path are more likely to provide better services to the company and its customers, which drives in more sales, return customers, and higher revenue.
Next, let’s explore some strategies for maintaining employee retention at your organization.
What Strategies Can Improve Employee Retention in Your Organization?
1. Employ The Right People!
You must hire the right people for your company. It is also important to choose people who will fit into your company culture. These are similar but not the same. A candidate may fit the role, but their personality may cause problems for the other employees and the organization.
When you hire right, employees stick around. When you rush and hire wrong, you can count on incurring even more employee turnover costs. Find ways to attract a candidate who aligns with your culture and will stick with your company for years to come. One way to do so is by asking them to describe what they think your company culture is like, knowing what they value in an ideal workplace.
See how you can make the recruitment process easier.
2. Compensation Packages Should Be Fair & Competitive
One of the major reasons employees leave is that they feel they aren’t adequately compensated for their work. If your employees know they’ll make more money if they leave their current position, why should they stay with you? You probably wouldn’t stay either if put in the same position.
A best practice for increasing employee retention is to ensure that employees are compensated, starting with baseline salary. You can also consider offering raises, promotions, bonuses, and equity.
Also, be familiar with the economic changes (i.e, cost of living), the changes in the compensation of your competitors, and the current market compensation rate. This will help you stay on track in offering the right compensation.
3. Always Provide Feedback
Providing feedback is crucial. Employees want to feel valued and appreciated for their contributions. They want to know areas of high performance, as well as specific skills that need improvement. This can go a long way in skill development and help employees feel seen and heard.
Employees who aren’t given feedback are left confused about their performance and unsure if they need to make changes, lacking guidance, and may go somewhere else to seek that validation.
4. Create Career Development Plans
Working with employees to create a path for development at work is a great way to encourage retention. It gives people a goal to work towards and can be a significant motivating factor.
Quarterly, bi-annual, or annual career development meetings where managers sit down with employees and discuss where they want to be, how they can get there, and what opportunities are open to them is a great way to practice this.
5. Create a Positive Corporate Culture
We’re not just talking about that document or PowerPoint presentation about what the company culture is. Company culture is the reality of working conditions within an organization. That PowerPoint presentation is self-deceit if it’s not a reflection of what happens every day in the company. Employees always see past such.
A company’s goals and values play heavily into its culture. Great company culture cannot be overemphasized when attracting and retaining top talent. An employee will stay for the company’s culture even if the compensation isn’t over the market rate. A qualified candidate won’t stay long at a job with high compensation if the culture is toxic.
You have the power to create a positive workplace for your employees. So, focus on designing an effective human capital strategy to ensure your employees feel valued, are compensated, are recognized for their achievements, and have plenty of opportunities for career development and advancement.
Retaining your employees often begins by employing the right people. But even then, it’s essential to continuously work to make employees feel safe, comfortable, and able to succeed at their jobs.
