Recruiting new employees can be hard, but retaining them is even harder. If you have not given serious thought to an employee retention program yet, it is time to do so. The post-pandemic work culture encourages workers to pursue what they are passionate about and only accept what they are worth. Hence, you have to ensure that you are doing enough to retain your employees for longer periods of time.
What is employee retention?
Employee retention refers to an organizational goal set by companies to retain their talented employees within the company for as long as possible. It reduces turnover and creates a positive work atmosphere that allows employees to thrive. Promoting employee engagement, appreciating employees for their hard work and offering adequate compensation and benefits are the cornerstones of employee retention.
Maintaining a higher retention rate can increase a company’s profits up to four times. Talented employees who have developed their skills and talents over the years can deliver better results for the company than immediate new hires who are yet to learn the ropes of the work. High turnover, on the other hand, can prove to be very costly. As per the 2020 Retention Report, replacing an employee can cost an organization about 30% of the employee’s annual salary. This means that quitting employees can cost the company thousands of dollars every month.
Implementing a successful employee retention plan will be beneficial for the company in the long run. 77% of companies believe improving employee experience and engagement will automatically increase retention. Engagement and productivity go hand in hand. Companies with a reputation of being good employers also attract more highly-skilled and talented workers.
Why do employees leave?
31% of employees quit their job in the first six months of their new position. It is an alarming figure and companies have to develop an effective employee retention plan to decrease their turnover. According to 2019 Work Institute research, 22% of employees resign for better professional development opportunities, 12% leave for work-life balance and 11% leave because of bad manager behavior. This means that three in four employees could have been retained by the employers.
The pandemic has further contributed to this problem. Many workers have begun rethinking their current employment. While some feel that it is time for them to opt for change, others want to escape the stagnation of their salary growth and skills development.
Some of the common reasons why employees leave are:
- Receiving inadequate salary and benefits can cause good employees to quit because they are unwilling to settle for less.
- Feeling unappreciated and unrecognized for their contribution can lead to employee burnouts. 80% of employees have left their jobs because of lack of appreciation.
- Companies that provide insufficient resources and outdated technologies are more prone to losing younger employees. 16% of Gen Z and millennial employees have decided to quit their job over inadequate technologies provided by the employer.
- Employees who feel stifled by the lack of career advancement opportunities at their current workplace will quit in the short run.
- The pandemic has led many workers to crave a better work-life balance.
- Lack of encouragement and motivation can often prevent employees from improving, which can cause boredom and monotony.
- Some employees choose to leave because they are dissatisfied with the company culture and its financial health.
Why employee retention is important?
Employee retention is crucial for the overall growth of the company in the long run. High turnover rates can adversely affect the organization’s growth rate and competitive advantage. The lack of continuity and wastage of institutional resources contributes to the high cost of rehiring. Other employees are also affected because employee departure hurts the team spirit and lowers morale within the workspace.
The benefits of employee retention are undeniable. Employee retention improves team building and leads to more cohesion in the office. As the employees begin to accept each other as permanent team members, they develop trust and camaraderie. Motivated and productive employees who work together will produce much better results for the company. It is also important to note that employees who rise through the ranks with hard work and develop loyalty for the company are more valuable than new hires who might have the correct skills for a higher position.
Employee retention plan
You might have many employee retention ideas, but it is important to form a cohesive employee retention plan. Once you round up the employee retention strategies you want to implement, you have to make a structured plan with goals and objectives.
1. Do your research
Conduct in-depth research through exit and stay interviews to understand the reasons why your employees leave. Departing employees usually provide candid feedback because they do not have to fear any negative repercussions. Measure the turnover rate based on the number of employees who leave the company in a given period. Compare what you learn with industry benchmarks to know where you stand in the market in this regard.
2. Enforce a survey and feedback culture
Nobody can point out underlying organizational issues that cause a high turnover better than the employees themselves. Survey your employees regularly to understand their engagement and satisfaction levels. Armed with anonymous feedback, you can improve specific areas of the organization. This will help you remedy problems at the root level and keep employees from leaving. You can also conduct stay interviews to know what you are doing right and why your employees are choosing to stay.
3. Smart onboarding
Old-school employee retention strategies are no longer as effective because the younger workforce is looking for something new. You can begin applying the employee retention techniques as early as the onboarding process if you want to be proactive. Interesting and effective onboarding activities can prevent employees from quitting in the first few months.
4. Run your ideas by employee focus groups
Once you come up with ways to retain employees based on the feedback you collected, it is time to run the ideas by a selected panel of employees. By organizing focus groups, you will be able to discuss and collect opinions about your strategies even before the implementation. You can make necessary improvements and ensure that the final plan is suitable for all employees.
5. Update the employee retention plan
The employee retention plan can be updated as and when required to suit the needs of the current market and your employees’ need. Set measurable targets and record employee response to know whether you have to make any changes.
15 innovative strategies for improving employee retention
Do not stress about how to retain employees. You can come up with numerous creative ways to retain employees if you put your mind to it. The key is to build workforce of skilled and loyal employees who are well-compensated and appreciated for their efforts.
The onboarding process sets the foundation of the relationship between new employees and the company. You can perfect the onboarding process by accepting feedback. Onboarding employees effectively can improve new hire retention by 82%. The new hires have to develop personal connections with team members, learn about the company and participating in training programs as part of onboarding. 76% of candidates stress the importance of on-the-job training as part of onboarding and 73% prioritize a comprehensive review of the company’s policies.
2. Flexibility arrangements
With the pandemic reinforcing the remote work culture, many employees will likely want to continue working from time. Flexible work timings can often make the difference between an employee staying and leaving. According to the FlexJobs 2019 Annual Survey, 80% of employees would feel more loyal to their employer if offered flexible work arrangements.
3. Internal mobility
According to the LinkedIn 2023 Workforce Learning Report, employees are more likely to stay at companies with internal mobility. High-mobility businesses retain talented workers for a median of 5.9 years. Individuals who feel that they can progress in your company will be more likely to continue their stay. The employees worth keeping will always look for more opportunities to develop their skills and get ahead in their careers.
4. Mentorship programs
New employees prefer to learn from someone more experienced. You can pair them with senior employees who agree to join the mentorship program. Mentors offer valuable guidance to newcomers and help them adjust to the new workplace.
5. Recognition programs
Nobody wants their hard work to go unnoticed. Showing appreciation and gratitude to employees and congratulating them on their achievements can make a huge difference. You can set up a formal reward system that will act as an incentive for employees to innovate and work harder. As per a 2018 report from SHRM and Globoforce, employee recognition programs can improve employee experience and employee relationships tremendously.
6. Encourage work-life balance
Burned-out employees will not perform well and are more likely to resign. As an employer, you should encourage them to cultivate work-life balance. Encourage them to sign off on time and let them enjoy their off-hours. Allow them flexibility when they want to make schedule changes. Your employees will appreciate your understanding.
7. Consistent training
Invest in the training and development of your employees so they can continue to deliver results in the long run. Help them learn new skills, so they are prepared to take on more responsibilities. Discuss their career plans with them and help them upskill to become more competent. Employees are more likely to leave if their growth is stunted.
8. Run employee surveys frequently
Survey your employees regularly to know the current state of employee engagement and satisfaction. Employees will be more honest if they can provide feedback anonymously.
9. Competitive compensation
Employees want to be paid fairly for their efforts and hard work. They are unwilling to settle for less, especially after the pandemic. You have to pay competitive compensation to employees based on the demands of the existing market. The great labor shortage of America is proof that employees would rather quit than be underpaid.
Great benefits and perks can boost employee morale. They will appreciate the company more because they get to enjoy benefits even outside the workplace.
11. Prioritize mental wellness
Too many organizations do not take the mental wellness of employees seriously, and that can lead to a high turnover. Invest in mental wellness initiatives to help your employees overcome challenges with vitality and resilience. Supporting your employees is non-negotiable.
12. Use AI
You can use AI to collect and analyze data pertaining to employee hiring, engagement and turnover. Detecting the patterns and trends will allow you to introduce changes based on real data.
13. Encourage teamwork
Many organizations believe that pitting their employees against each other is the best way to boost productivity. While healthy competition can promote growth, it can often make employee relationships difficult. Encourage teamwork by providing collaboration opportunities and holding frequent group discussions. You can also organize out-of-office hangouts so that employees can get to know each other. Employee relationships based on trust and respect will be more beneficial for the workplace in the long run.
14. Show the results of employee feedback
By giving employees a voice of their own, you will open the door to endless feedback. However, that is not enough. You have to act on their feedback, so they know that their voices are respected.
15. Employ better communication tools
Invest in technology that facilitates faster and better communication among employees. Positive, timely and constructive communication will improve employee communication and boost job satisfaction.
Bites is a modern learning solution that will be an invaluable addition to your employee retention plan. Designed to make onboarding and training more accessible for employees in all industries, Bites allows you to make short and compelling video modules on every subject. You can compile the videos into a comprehensive playlist and share them with your employees. Video learning allows employees to feel more personally connected with their superiors, especially because Bites offers a discussion forum. Ongoing training also lets employees know that you care about their growth and development.
Bites is easy and inexpensive to set up. It is ideal for both in-office and remote employees because the videos can be accessed anytime.