Employees leave organizations for many reasons; often these reasons are unknown to their employers. Employers need to listen to employees’ needs and implement retention strategies to make employees feel valued and engaged to keep them. These retention methods can have a significant and positive impact on an organization’s turnover rate. Here we’ll take a look at some of these strategies. According to strategic planning consultant Leigh Branham, SPHR, 88% of employees leave their jobs for reasons other than pay: However, 70% of managers think employees leave mainly for pay-related reasons. Branham says there are seven main reasons why employees leave a company:
1. Employees feel the job or workplace is not what they expected.
2. There is a mismatch between the job and person.
3. There is too little coaching and feedback.
4. There are too few growth and advancement opportunities.
5. Employees feel devalued and unrecognized.
6. Employees feel stress from overwork and have a work/life imbalance.
7. There is a loss of trust and confidence in senior leaders.
Turnover Facts and Figures Turnover is costly. According to Right Management, a talent and career management consulting firm, it costs nearly three times an employee’s salary to replace someone, which includes recruitment, severance, lost productivity, and lost opportunities. Life Work Solutions, a provider of staff retention and consulting services, provides the following turnover facts and rates:
· Over 50 % of people recruited into an organization will leave within two years.
· One in four new hires will leave within six months.
· Nearly 70% of organizations report that staff turnover has a negative financial impact due to the cost of recruiting, hiring, and training a replacement employee and the overtime work of current employees that are required until the organization can fill the vacant position.
· Nearly 70 % of organizations report having difficulties in replacing staff.
· Approximately 50% of organizations experience regular problems with employee retention.
From these statistics, it’s clear that it’s important to develop a retention plan to retain employees and keep turnover low.
As explained by EA Consulting Group in a recent white paper, the dilemma facing organizations is whether to invest more time and money fine-tuning their recruitment strategy or to pay extra attention to retaining the talent they already have. Recruiting new staff is expensive, stressful and time-consuming. Once you have good staff, it pays to make sure they stay (Main, 2008). Think of retention as re-recruiting your workforce. Recognize that what attracts a candidate to a particular job is often different from what keeps that person there. While salary certainly is a key consideration for potential employees, pay alone won’t keep them in a job (Angott, 2007). Advantageous aspects other than strictly compensation attract good employees; something more than a number retains them. Today employees are looking for a career package, including comfortable company culture, career path, diversity of responsibilities, and a work/life balance (Griffiths, 2006). Here are some effective methods employers utilize to keep employees happy and part of their organization instead of looking for employment opportunities elsewhere.
Training employees reinforce their sense of value (Wingfield, 2009). Through training, employers help employees achieve goals and ensure they have a solid understanding of their job requirements (Maul, 2008).
A mentoring program integrated with a goal-oriented feedback system provides a structured mechanism for developing strong relationships within an organization and is a solid foundation for employee retention and growth (Wingfield). With a mentoring program, an organization pairs someone more experienced in a discipline with someone less experienced in a similar area, with the goal to develop specific competencies, provide performance feedback and design an individualized career development plan (Goldenson, 2007).
Instill a positive culture.
A company should establish a series of values as the basis for cultures such as honesty, excellence, attitude, respect, and teamwork (IOMA, 2008). A company that creates the right culture will have an advantage when it comes to attracting and keeping good employees (Main).
Use communication to build credibility.
No matter what the size of the organization, communication is central to building and maintaining credibility. Many employers get communication to “flow up” through a staff advisory council (or similar group) which solicits and receives employees’ opinions and suggestions and passes them on to upper management (IOMA). It’s also important for employees to know that the employer is listening and responds to (or otherwise acknowledges) employee input.
Show appreciation via compensation and benefits.
Offering things like competitive salaries, profit sharing, bonus programs, pension, and health plans, paid time off, and tuition reimbursement sends a powerful message to employees about their importance at the organization. The rewards given to employees must be meaningful to impact their perception of the organization and therefore have a marked influence on its retention efforts. Moreover, if an organization promises a reward, it should keep that promise (Gberevbie, 2008).
Encourage referrals and recruit from within.
Having current employees offer referrals could help minimize confusion of job expectations. Current employees can realistically describe a position and the environment to the individual he/she is referring. Another way an employer can lessen the impact of turnover is to hire from within since current employees have already discovered that they are a good fit in the organization (Branham, 2005).
It’s important for companies to give feedback and coaching to employees so that their efforts stay aligned with the goals of the company and meet expectations. During an employee’s first few weeks on the job, an employer should provide intensive feedback. Employers should also provide formal and informal feedback to employees throughout the year (Branham).
Provide growth opportunities.
An organization should provide workshops, software, or other tools to help employees increase their understanding of themselves and what they want from their careers and enhance their goal-setting efforts (Branham). It’s important to provide employees with adequate job challenges that will expand their knowledge in their field (Levoy, 2007). According to Right Management, employees are more likely to stay engaged in their jobs and committed to an organization that makes investments in them and their career development.
Make employees feel valued.
Employees will go the extra mile if they feel responsible for the results of their work, have a sense of worth in their jobs, believe their jobs make good use of their skills and receive recognition for their contributions (Levoy). Employees should be rewarded at a high level to motivate even higher performance. The use of cash payouts could be used for on-the-spot recognition. These rewards have terrific motivational power, especially when given as soon as possible after the achievement. It’s important for employers to say “thank you” to employees for their efforts and find different ways to recognize them. Even something as simple as a free lunch can go a long way towards making employees feel valued. Listen to employees and ask for their input as to what rewards might work best at your organization. Conduct meetings and surveys to enable employees to share their input (Branham). Most team members will work harder to carry out a decision that they’ve helped to influence.
Lower stress from overworking and create work/life balance.
It’s essential to match work/life benefits to the needs of employees. This could be in the form of offering nontraditional work schedules (such as a compressed work week, telecommuting, and flextime) or extra holidays. When work-life balance is structured correctly, both the employee and employer come out ahead. For example, the employer will experience more productivity in the workplace because employees will be less stressed, healthier, and thus, more productive (Wingfield). Encouraging employees to set work/life goals, such as spending more time with their children, communicates that you do want them to have a life outside of work and achieve a healthy work/life balance.
Foster trust and confidence in senior leaders.
Develop strong relationships with employees from the start to build trust (Stolz, 2008). Employees have to believe that upper management is competent and that the organization will be successful. An employer has to be able to inspire this confidence and make decisions that reinforce it. An employer cannot say one thing and do another. For example, an employer shouldn’t talk about quality and then push employees to do more work in less time. Also, employers need to engage and inspire employees by enacting policies that show they trust them, such as getting rid of the authoritarian style of management (Branham).
It’s clear that having proper retention strategies is critical to retain employees. According to Mike Foster, founder, and CEO of the Foster Institute, to foster an environment that motivates and stimulates employees, managers need to incorporate motivation-building practices into their corporate culture. These practices include listening to employees and respecting their opinions, basing rewards on performance, and being available to them for everything from listening to their ideas and concerns to assisting them with their career advancement. Employees need to feel valued and appreciated, be given feedback, provided with growth opportunities, be given work-life balance options, and have trust and confidence in their leaders (Branham). All of these retention strategies are beneficial when an employer wants to keep employees within an organization and keep costs of turnover low.
How to Understand the ROI of Investing in People
Four Steps to Increase Employee Lifetime Value
· Shorten an employee’s ramp time to become a fully contributing member of the team
· Increase how high they can go (regarding output)
· Increase how much higher they go over time
· Lengthen the time they stay with the company
Best Employee Benefits
In red hot hiring market, a generous benefits package is essential for attracting and retaining top talent. According to Survey, about 60% of people report that benefits and perks are a major factor in considering whether to accept a job offer. The survey also found that 80% of employees would choose additional benefits over a pay raise.
You don’t need to break the bank to offer attractive extras. A new survey conducted by Fractl found that, after health insurance, employees place the highest value on benefits that are relatively low-cost to employers, such as flexible hours, more paid vacation time, and work-from-home options. Furthermore, we found that certain benefits can win over some job seekers faced with higher-paying offers that come with fewer additional advantages.
Student loan and tuition assistance are ranked highly on the list of coveted benefits, with just under half of respondents reporting that these bonuses could nudge them toward a lower-paying job.
Goodly – Goodly makes it easy for companies to offer student loan debt repayment as an employee benefit. Companies that provide this simple to use platform cut down the time that their employees would otherwise be in debt by an average of 8 years. This benefit can be used as a powerful tool for recruiting and retention while fostering diversity, inclusion and financial wellness.