Why retaining employees is the better option
Recruiting, interviewing, training and onboarding new employees can easily cost thousands of dollars, depending on the position being filled, and it may take months before an employee settles into their role. Besides saving time and money, there are other benefits to retaining employees, which include:
- Employee loyalty: Retaining good employees who are loyal to the company can inspire other workers to feel more motivated. Customer service benefits directly from loyal employees who only have positive things to say about the company.
- Expertise: It’s said that it takes 10,000 hours to become an expert at anything. The longer an employee works and grows in your company, the more of an expert they become.
- Stronger culture: Businesses with a clearly defined culture are better places to work. Employees who work together for long periods of time become engaged with and strengthen that culture.
Employees who have been at a company longer are more likely to be successful at their job, which makes them valuable assets that save the business money, no matter the industry.
The reasons employees leave
According to a recent study by the Work Institute, 78% of the reasons that employees quit could have been prevented by the employer. This means that over three-quarters of employee turnovers are preventable. Some of the most cited reasons mentioned during exit interviews included:
- Lack of career development: A lack of growth or development opportunities was one of the most common reasons given.
- Poor work-life balance: Having to work an undesirable schedule with little flexibility left many employees feeling fed up. Having to commute instead of working remotely was also a commonly mentioned issue.
- Upsetting manager behavior: Poor communication and unprofessional behavior from supervisors were primary concerns. Employees were also upset by a lack of awareness and ignorance of a coworker’s behavior.
- Perilous job characteristics: Fear of injury or mental breakdown caused by an unsafe workload caused many to quit. Specifically, being forced to complete tasks and physical labor not listed in their job description made them feel uncomfortable.
- Unsatisfactory compensation and benefits: The high cost or lack of availability of benefits caused many employees to seek other opportunities.
It’s important to understand why employees leave to avoid a high turnover rate. By recognizing patterns of employee dissatisfaction, you can proactively make changes with a positive impact on retention.
Ten strategies to improve employee satisfaction
As an employer or manager, there are many positive practices that you can implement to encourage employees to stay. Some are monetary, but many of them don’t involve providing a raise. It’s important to remember that employees are human and value being treated fairly.
Some practices to help keep your employees happy in the office are:
- Delegate responsibility: When you give employees important tasks, it makes them feel valued. Be sure to delegate interesting and important tasks and not just routine ones.
- Create revenue-sharing and rewards: Revenue-sharing provides opportunities to tie their results to salary incentives. Other rewards programs that can help retain employees include offering gift cards, bonuses and additional PTO.
- Offer competitive benefits: When it comes to retaining employees, sometimes benefits can make a difference. Good health care packages, PTO and perks that help sustain work-life balance encourage employees to continue working with the company. Read more about benefits enrollment.
- Be inclusive and respectful: When managers make employees feel respected, they create a culture where employees feel comfortable speaking up. Allow everyone at the meeting to share their opinions and ideas. Regular exchange of ideas should be encouraged and always done in a respectful manner.
- Have a positive leadership team: Management interactions can impact whether someone has a positive experience with their job. Ensure managers practice management strategies that focus on reward, instead of negative reinforcement. Strong leadership directly affects employee performance and productivity.
- Create a culture of empowerment: Creating a culture of empowerment means supporting employees at every step of their career journey. Offering development programs and training opportunities can help employees feel empowered and in control of their careers.
- Provide clear communication: Your workforce will appreciate transparency in your corporate communications. Weekly newsletters and daily briefs help keep team members aware of important events. Providing frequent surveys also allows employees to provide regular feedback. Communication between employees and managers should be a part of the culture of the company.
- Encourage flexibility: A little flexibility can go a long way to support an employee’s needs. Offering perks, such as flex-time, can help employees feel less stressed about issues at home that need to be addressed. Relaxed employees are able to focus better on work, and they might also be more understanding when you ask them to work additional or alternate hours. Read more about flex schedules.
- Show character and be authentic: As a manager, it’s important to project an image of authority, but it’s also important to be human. Allow yourself to be authentic when it’s appropriate to do so.
- Face challenges enthusiastically: Challenges offer an opportunity for success. Often employees are disheartened when management responds negatively to stressful events. Managers who face challenges enthusiastically inspire employees to do the same.
These practices can be combined to create effective strategies in your employee retention policy.
Why create an employee retention policy
An employee retention policy outlines strategies managers should adhere to to ensure employee retention. This document outlines a program that provides increased stability for workers and their families, so they can focus on their responsibilities. It includes management strategies, benefits offered, human resource policies and more.
Items that may be addressed in your policy are:
- Employee compensation strategies: There should be quantifiable expectations to determine when pay raises should occur, as well as when benefits are provided and perks are awarded to employees.
- Work environment standards: These should outline the practices to keep a safe and healthy space for employees to work. Physical, mental and social well-being should all be considered.
- Pathways for employee development: Career development provides employees with an ongoing mechanism to enhance their skills and knowledge. Clear pathways to promotion should be established.
- Employee assistance programs: Making services available that can help workers and their families cope with crises reflects that you are invested in an employee’s well-being. Read more about employee assistance programs.
- Recognition policies: Have benchmarks for tenure and performance that set clear guidelines on when and how to recognize an employee.
FAQs about how to retain employees
These answers to frequently asked questions about employee retention can provide you with more information about how to retain good employees.
Why should managers measure employee retention?
By looking at employee retention data, such as turnover rates and reasons why employees leave, employers can understand how their managers are handling employees and what operational challenges are faced in daily activity. Employee retention can be directly correlated to managerial success.
What is an employee retention rate?
Employee retention rate is the total number of retained employees at your company measured over a given period of time. Your employee retention rate can give you insight into the overall health of your business. It also helps determine the total number of employees you’re able to keep for budgeting purposes. Read more about how to calculate retention rate.
What is a retention bonus?
A retention bonus is a payment or reward outside of the regular salary that’s offered as an incentive to keep a key employee on the job. Bonuses usually occur during stressful business cycles, such as holiday sales seasons or periods of intense production demand. They let an employee know that their dedication and work ethic are recognized.
What is a retention survey?
Employee retention surveys consist of questions that discover what makes workers happy or unhappy. They provide valuable insight into morale and encourage employees to share their feedback in a confidential way. It’s important to regularly offer retention surveys to stay informed about employee views.