Recruiting top talent is a challenge in itself. Talent acquisition requires significant investment – both of your time and your finances – especially following the Great Resignation and the resulting shortage of talent for workplace roles. Now so many roles enable you to work from home, employees have an ever-greater pool of employers to evaluate before making their choice.
But once you’ve got the best of the best on your books – how on earth can you ensure they stay?!
Employees are always on a professional journey and are unlikely to stay with you for the duration of their careers. But having an effective employee retention strategy ensures that there is no obstacle to the best staff staying with you – for as long as they can. Making sure you remain competitive, enticing, rewarding, challenging, and responsive are crucial factors in your employee retention rate.
In the blog below, we explore the best employee retention strategies and lay out the advantages of employee retention – a brief ‘how to’ to keep those productive, positive employees with you for the long haul.
Employee retention definition
The meaning of employee retention can vary subtly depending on the working environment, but it always involves creating the best environment within which your staff can flourish. A comprehensive employee retention program outlines exactly what employee retention means for your firm, and the ways in which you can position your business as the best workspace open to them.
You can do this through obvious bonuses such as attractive financial compensation or lifestyle and work-life balance schemes, ranging from working from home to subsidies for healthcare and wellbeing. But there are also more subtle factors to an efficient employee retention scheme that can be just as pertinent, such as further education, full integration, and corporate transparency.
Why should you invest in an employee retention strategy?
This article from the Undercover Recruiter illustrates the true cost of a new hire. All employers are aware of the new salary they’ll be paying out – but some forget the significant investment a new staff member necessitates. For a new employee on a wage of £27,600, an employer will shell out closer to £50,000 in the first twelve months. That covers the recruitment process, as well as their salary, bonuses, National Insurance, pension, training, office space and equipment, and other miscellaneous costs. That doesn’t even account for the personal time spent interviewing and educating, the cultural impact of new staff members, and the productivity dip everyone involved undertakes when bringing a new hire up to speed. You can see it’s a significant undertaking – and that there’s a real impetus to keep staff on, rather than be going through this process every few months.
An employee retention strategy looks holistically at every aspect of the role and explores every way you can ensure the environment you create is as attractive as it’s positive for you to make it. A 2020 Work Institute study discovered that a staggering 75% of employee turnover was preventable – so why not invest in a strategy to become the place your employees want to stay?
Why do employees want to leave a company?
Sometimes employees have personal reasons to leave. Relocating due to partners with work prospects further afield, looking to change career routes, or just being offered a more attractive financial prospect elsewhere. Sometimes you just can’t compete. But there are distinctive, and often repeated reasons that employees cite in exit interviews as reasons they are leaving – reasons that you absolutely can have influence over. Besides citing an inadequate salary, the reasons employees often cite for quitting during their exit interview include factors such as:
- Feeling overworked
- Feeling undervalued
- Feeling unsupported
- Desiring a better work-life balance
- Lack of recognition
- Unhappy with management/boss
- Unsure of company’s stability/financial health
- Feeling unhappy with company culture
- Uncompetitive benefits/perks package
- Limited career advancement opportunities
How do you measure employee retention?
Employee retention is usually calculated on an annual basis, but you can always track specific teams or departments separately, depending on the size of your business. A 90% retention rate, or above, is considered good – but remember, a 100% retention rate might not be desirable either, as you want those who don’t fit the company perfectly to feel able to leave and make space for more appropriate staff.
Effective employee retention strategies
The new-hire process
The best employee retention formula is to create an environment in which the employee is able to shine from day one. That means a successful onboarding process. The orientation period should not only teach them about the job they’re expected to do, but also lay out company culture, how they’re expected to interact with it, and the ways in which it can help them thrive.
Employee benefits and compensation
Compensating your employees at a competitive rate ensures you don’t fall by the wayside. However good the workplace, few are prepared to stomach being paid fair below the market rate for their efforts. That means regular evaluation and adjustment, too – it’s not a ‘one-and-done’ checklist for new hires but something that should become a part of annual or semi-annual appraisal processes.
Aside from financial rewards, some benefits and bonuses can really enrich the workplace experience. Healthcare benefits, attractive pension schemes, and wellbeing subsidies are all perks that can keep an employee onboard.
Less compensation and more of a job ‘perk’ are your policies when it comes to things like Parental Leave. Attractive leave options can be a truly persuasive force.
As you onboard a new employee, it can be invaluable to match them up with an existing employee – preferably a shining example of productivity and company culture. This can become an extended onboarding process, too, as this relationship continues post-training. It can be especially valuable in a remote working environment, where person-on-person individual relationships can be harder to build. This is a two-way street – the new employee gets given a whistle-stop tour of the company, and the more established employee gets a blast of fresh air and refreshed viewpoints from the new hire. Existing staff can also benefit from mentorship programs, across departments or just across the hierarchy of the company.
Trusting your employees to get the job done, and giving a little space and flexibility in the ways in which they might do so, can be a massive boost when it comes to keeping employees happy and loyal to your firm. Flexible schedules and remote working, ‘Agile’ options are so much more common than they used to be, but many employees are still pushing these factors right up the list of ‘selling points’ when it comes to looking for a new role (and staying in it).
Wellness and health perks
A happy and healthy employee, both mentally and physically, is an employee who is much more likely to remain proactive, dedicated, and with your business. Subsidies for fitness classes, in-house yoga, and stress management programs are just three examples of investments you could make in the business to provide attractive wellness perks.
Transparency and dialogue
It’s hard to remain loyal to a business when you feel alienated from the processes guiding it. All employees should remain ‘on page’ about company progress and aspirations so that they can help reach these goals. Similarly, good workplace communication is crucial (especially in an era of remote and hybrid working). Regular one-on-one connection with each team member individually allows them an opportunity to voice any concerns over their workload and job satisfaction levels, as well as providing an opportunity for them to share their vision and unique insight into company progress and feel heard in this.
This piece on continuous performance management outlines why constant feedback is a much better appraisal system than the traditional, stand-offish annual sit-down. More frequent, informal meetings (be they one-to-one or with smaller teams) allow them to share unique insight, and make sure that their long-term and short-term goals fit the direction and goals of the company.
Education and training opportunities
With continuous feedback comes the opportunity for employees to voice their desires when it comes to career growth. You won’t be able to accommodate all of their aspirations, but identifying areas of professional growth they are keen to commit to, and that also fit the company’s journey, is a valuable process. Contrary to what some cynics may believe, upskilling isn’t setting your employee up to be better for their next workplace – it’s setting them up to be the most productive they can be for your firm, now. Similarly, time and financial support to attend conferences and other types of continued education can be highly successful ways to keep your employees – and build your own, tailor-made future leadership team.
Reward and recognition
Feeling underappreciated never made an employee stay in their role. Gratitude and even acknowledgment from an employer can mean the world – especially after a spell in which the employee has been expected to commit 110%. Explaining how valuable their efforts are to the organization is key, and you can even create recognition programs.
Acing the work-life balance
Presenteeism does no one any favors. If your company culture favors showing up to spend as many hours a day at your desk as possible over actual results, it likely needs reassessing. A healthy work-life balance is crucial for job satisfaction but also makes for more productive employees. Especially in remote working environments, establishing those boundaries can be tough – so it needs to be coming from the top. Encourage boundaries such as not checking emails after a certain time in the evening, and safeguarding vacation time. If employees are expected to work late for a period, consider financial compensation or time off to recompense them.
Offering flexible, agile working
Post-pandemic, the way people work has changed. Even though many workspaces are back open, many employees have found that Agile working really suits them, and would still prefer to work remotely – at least for a few days a week. It’s worth considering if a compressed working week, flexible working hours, and remote options are something you can commit to long-term, to help in boosting employee retention.
Problems faced when implementing employee retention strategies
Yes, all we’ve spoken about is retaining those high-performing staff members. The reality is, though, that you will sometimes lose top talent, and there may be nothing you could have done to keep them. Adequate preparation for this outcome is crucial, too – you need to ensure you maintain a positive profile, and remain a brilliant place to work so that losing a top player isn’t going to deal the firm a devastating blow. Succession planning can be key here. At the end of the day you don’t want someone on your team who no longer wants to be there, for whatever reason. So working to maintain your competitive appeal will ensure their shoes get filled by someone more excited by the opportunity.
Stereotyping isn’t useful either. Using data and AI to your advantage can reveal trends to be untrue, and uncover the reality of the situation. For example, perhaps you predict January to be the month where you face the biggest number of quitting staff members, but data might show in fact that this is Q3. Use the data at your fingertips to work for you.
Inevitably, some staff members will leave you before you’d like them to. But effective employee retention strategies can at least make their decision a little harder to make. And if they still move on – creating an environment where they were supported, compensated, and valued should ensure that they have only good things to say about your business, in turn attracting top talent to fill their boots. Browse the Unleash archives for more insight into creating a proactive, dedicated workforce.