More than 17% of employees leave their jobs within the first month. The process results in a high employee turnover that costs US businesses 1 trillion annually. Generally, companies tend to lose one-half to two times the salary of the employee who left.
As a result, every employer should make an effort to retain their employees. They should develop sound employee retention strategies to reduce their employee retention rate.
Let’s find out how you can facilitate the process and improve your employee retention.
Why Employee Retention Is Important
Employees leave when they are unhappy. Therefore, your retention initiative will make your employees feel valued and a part of the team. They can form strong connections with their peers and give their best to achieve your business objectives,
Moreover, employer Loyalty
s who work for a long time are able to pick up different skills. They will be able to identify problems and provide solutions adeptly.
In comparison, a new hire will need time to learn their responsibilities and build skills. Therefore, the company has to bear a huge cost when employees leave.
Best of all, employees are able to perform better and develop strong morale. when they are unhappy, and they turn into loyal employees. ‘
In addition, a high turnover rate affects the whole organization.
Existing employees don’t find the inspiration to work or collaborate with known faces.
Additionally, the business will need to train a new employee once again. It will take time and delay the workflows of the company.
How to Calculate Employee Retention Credit?
Businesses had a hard time paying their employees during the pandemic. As a result, the government announced many payroll tax credits to help employers retain their employees.
The Employee Retention Credit (ERC) is a refundable tax credit employers may claim on payroll wages.
The employee retention tax credit was 50% of qualified wages in 2020. However, the IRS decided to increase the credit limit to 70% in 2022 to provide more relief to businesses.
Qualified wages cover salaries or any additional compensation paid to employees. The list may include perks like health insurance many employers offer.
However, employers may claim up to $7,000 under the ERC limit for one quarter. Moreover, the maximum qualified wage eligible for tax credits is $10,00 for one employee.
You can find out the 70% of the qualified wage you pay to determine how much ERC you may receive.
Employers with fewer than 500 employees may be able to claim the tax refund even if they are working. However, companies with over 500 employees may get the benefit only if their employees are not able to work due to lockdowns.
Summary: Find out the 70% of the qualified wage of each employee to calculate employee retention credit.
How Long Do You Have to Keep Employees for PPP?
The Paycheck Protection Program or PPP assists businesses in maintaining the count of their workforce. The need for PPP arose as many entrepreneurs had to lay off employees or place them out of work due to low demand for products and services.
The PP is a forgivable loan available from the government to rehire your employees. You can use the funds to hire back the employees you had to let go during the pandemic.
However, businesses may also utilize the funds to hire new talents to fill in the labor shortage.
Unfortunately, the PPP comes with a time limit of 24 weeks once you apply. During that period, you may rely on your PPP funds to pay your staff.
However, you will stop receiving funds once 24 weeks is over. You will have to look for other options after that or let go of your employees.
How to Improve Employee Retention
The first step to boosting employee retention is to implement a solid employee engagement program. It can make your employees 58% more likely to work in your company even after 3 years.
You can use employee retention tools and solutions like Bites to onboard your employees. It allows you to record and share short videos for employee training and engagement.
In addition, don’t overload your employees with too much learning. You can use trends like microlearning to make learning easily digestible.
Additionally, help your employees to achieve a suitable work-life balance. Many people now choose to work from home and visit the office only a few days a week.
So, stay flexible and understand the needs of your employees. You should also build a connection with each employee and check in on them often.
It shows you care for your employees who love to work for you. As a result, you don’t need to worry about employee turnover.
Moreover, invest in the learning and development of your workforce. 94% of employees want to work in a company for longer if the employer helps them learn.
You can use an employee retention platform that lets you implement educational programs. Bites can also be a great way to send short educational clips to help your employees learn, even on the go.
In addition, you should empower your employees with the right tools and resources to work. It shouldn’t happen that a new hire has to ask around for passwords and IDs to log in to the company account.
Moreover, provide all the information your employees will need to work productively.
Another factor you should consider is employee engagement. Data shows that 15% of US employees are not engaged in their work.
As a result, they perform poorly, hamper productivity, and impact the success of the company. They are also the ones to sign the resignation letter after a few months of joining.
Therefore, work to improve employee engagement. Make work fun and encourage your employees to form strong bonds. You may also improve engagement by giving your workforce new responsibilities and roles.
Most importantly, work on your managers and improve their relationships with the rest of the team. Often, employees leave due to bad or abusive managers.
Therefore, you will have to promote a friendly work culture where everyone feels welcomed to work and contribute.
How to Keep Employees from Leaving
Employers should be fair and equal to every employee in the organization. Any form of discrimination or harassment that is not addressed can make your employees quit.
Therefore, treat everyone equally and ensure each employee has the same rights. In addition, you can take several steps like:
- Showing appreciation for good work
- Rewarding top performers with day-offs, movie tickets, and so on
- Listening to your employees and their problems
- Paying your workforce on time and in full
- Not allowing your employees to work beyond scheduled timings
- Giving days off for vacations
- Signing up your employees for degrees and courses
However, it is also necessary to hire the right people to improve employee retention. If you hire a person who is not passionate about their role, they are more likely to leave earlier.
Final Thoughts
Employee retention is a priority for every business. Companies should hire the right people and provide a good onboarding program. In addition, it is necessary to recognize and reward good work. Employers should also stay flexible and ensure their employees achieve the perfect work-life balance.