Employee Retention Strategies
These days, it’s only getting harder to find quality candidates. The unemployment rate is low (3.40 %) and sinking.
Your job-market competitors are getting desperate too, and they will stop at nothing to get the best people they can—even if that means luring your employees.
Why You Must Develop A Retention Strategy
According to a CAP study, the average costs to replace an employee are:
- 16% of annual salary for jobs earning under $30,000 a year, e.g., the cost to replace a $10-per-hour retail employee would be $3,328.
- 20% of annual salary for jobs $30,000 to $50,000 a year, e.g., the cost to replace a $40,000-per-year manager would be $8,000.
- Up to 213% of annual salary for highly educated executive positions, e.g., the cost to replace a $100,000-per-year employee would be $213,000.
Ensure the success of every new team member from day one and beyond. Develop an onboarding process that goes beyond simply providing information about the job, and also encompasses the company culture and how new hires can make a meaningful contribution. Utilize this opportunity to have conversations about agreed-upon short-term and long-term goals, enabling new team members to establish priorities and seamlessly integrate into a productive routine as soon as possible.
Keep Growing Employees
For the average American worker, they will spend 90,000 hours of their life working. That’s one-third of a person’s lifetime. When someone is bored or unchallenged at work, they disengage. Their productivity tapers off (likely as they look for a new job). And finally they leave for something more exciting. For long-time employees, they may be doing the same or similar tasks to what they were doing when they started, and it becomes tedious. If you can’t find something just yet, offer an education stipend for online courses so that, together, you find a happy middle.
Recognize and Reward
Everyone wants to feel appreciated. Managers often assume that employees will intuitively understand how their efforts fit into the mission of the department and the company at large. Make a habit showing gratitude to your direct reports when they do a good job. Let each employee know the relevance of their position in fulfilling a greater goal and find ways to acknowledge their good work and its macro contribution. Be intentional in conversations with employees, and highlight their recent wins. Some companies set up rewards systems that incentivize great ideas and innovation, but you can institute recognition programs even on a small team with a small budget.
Foster Relationships With Management
Employees don’t necessarily have to be friends with their boss(es), but they need to have a relationship with them. It’s obvious that an uncomfortable relationship will foster disengagement, but so will a non-relationship. Provide regular feedback. Get off of Slack or other digital channels to speak directly every now and then. Spend time in one-on-one meetings. In today’s job market, there is no such thing as one-way loyalty. Managers must be active (non-micro-managerial) participants in their employees’ success
Research from Gallup has shown that strong friendships among coworkers are a boon to businesses.
- Employees who have best friends at work are 7x more likely to be engaged in their jobs
- Employees who have at least three “vital friends” at work are 96% more likely to be satisfied with their lives.
But does it seem weird to seem to be trying to get your employees to be friends? In an interview with Gallup, Tom Rath, author of Vital Friends: The People You Can’t Afford to Live Without, said:
“What companies can do is set up an environment that promotes or encourages friendships, because whether organizations like it or not, they’re in the business of creating friendships. If an organization doesn’t encourage friendships, its employee engagement — and, soon after, its profits — will go down dramatically.”
In today’s competitive job market, being excessively frugal in the short term can lead to long-term expenses. Compensation goes beyond just salaries and encompasses various elements such as bonuses, paid time off, health benefits, retirement plans, and additional perks that can distinguish your workplace. It is essential to consider these factors as they contribute to attracting and retaining talented employees in a highly competitive environment.
At the root, the issue of retention can largely be summarized as it relates to Maslow’s Hierarchy of Needs. If you’re struggling with employee retention, it’s likely because they feel that one or more of these needs isn’t being met.
- Physiological Needs – In the workplace, this translates to compensation and money-saving benefits.
- Safety Needs – This translates to employee benefits that positively affect employee health, ensuring a safe and tolerant work environment, and displaying loyalty to employees so they don’t doubt their job security.
- Social Belonging – Create strong teams, hold company-wide events, and foster relationships between employees and management.
- Esteem – This ties back to recognition, feedback, and rewards.
- Self-Actualization – This is when employees are challenged, stimulated, constantly learning, and offered opportunities to grow.
If you can create a work environment that embodies these five principles for all of your employees, you won’t have to worry about employee retention ever again.
Affordable employee benefits like the Alliance Value Plan are a great way to complement and enhance your current benefits package or offer incentive to loyalty to part-time, contract, and seasonal workers. The Alliance Value Plan gives your employees access to 24/7 telemedicine, 24-hour emergency roadside assistance, identity theft protection and more for under $10/month per employee. Group plans are available or benefits can be billed directly to employees if they wish, learn more about our Value Plan group plans here.
Offering a great benefits package is just as much a statement of company values and culture as it is a way to help your employees, keep them happy, and keep them on board.