If you’ve seen a Marvel movie in the last ten odd years, then you know the importance of the recruitment process and building a powerful team. Whether you’re looking to save the universe or increase your business’s revenue, you can’t do it alone. Running a business calls for a team effort, and the strength of that team can make or break your success. When you find the right people, you’ll want to keep them as long as possible. However, for employees to make a long-term commitment, their employer has to give them a good reason to make them stay. By being proactive and creating an environment that your employees feel comfortable in and enjoy contributing to, you can ensure that your employees remain loyal for years, decades, or even for life. In this article, we are going to cover the importance of employee retention strategies and some actionable steps you can take to retain your top talent . Avengers (and co-workers) assemble!
While there are plenty of fish in the sea, there’s no denying that employee job satisfaction matters for many reasons. Employee turnover comes with both hard costs and soft costs. Let’s take a look at both of these.
Hard costs refer to actual cold hard cash, which you will be spending more on if you have a high employee turnover rate. Studies show that replacing an employee can cost the same amount as anywhere from six to nine months of that employee's salary . For higher positions such as managers making $80,000 a year, that’s $40,000 to $60,000 worth of training and recruiting . However, the cost of replacement varies depending on the position. Typically low paying, high turnover jobs cost 16% of the employee’s annual salary . For mid-level and high-level jobs, replacement costs are 20% and up to a whopping 213% of the employee’s annual salary , respectively. Investing in employee retention can save you big time in the long run.
The cost of replacing an employee goes deeper than the large metaphorical hole it will inevitably burn in your wallet. Soft costs are things that you can’t necessarily quantify with a dollar sign, such as:
The true cost of employee turnover remains largely unknown since most businesses don’t take the time to track things like the costs of recruiting , hiring , training, administrative costs, and the loss of valuable expertise. By collaborating between your HR , financial, and operations office, you can better understand what employee turnover is costing your business and develop strategies for employee retention.
Now that we’ve hopefully convinced you of the importance of employee retention let’s go over some ways that you can make sure that your businesses' best employees are there to stay. While each business will want to take a specific approach that complements their specific needs, here are six basic ways to reduce employee turnover . It so happens that they also all begin with the letter R.
The first step in finding long-lasting employees is ensuring that they are a good fit for your company. Patty McCord , the Chief Talent Officer at Netflix, states that she only hires “A-Players”. According to McCord, A-Players are employees that put the needs of their colleagues and the organization before their own. Not only does this bring more motivated and productive members to your business, but it also makes sure that your employees are working with excellent colleagues. Having supportive, competent co-workers is often more motivating than “casual Friday”. While finding “A-Players” does require more research, transparency , and more expensive salaries , the payoffs are often worth it. Furthermore, as with most things in life, first impressions are extremely important. It’s imperative that from the moment a new employee joins your business, they encounter positivity, respect, and clarity from their managers and supervisors. By including things like CEO meet and greets, team lunches, and extensive introductions into your onboarding process , you can make sure that your new hires feel at home.
As we’ve all been told a hundred times since kindergarten, treating people the way you’d want to be treated is the golden rule. In the workplace , a little respect can go a long way. While employees may not remember every word you say, they will remember the way you made them feel. Fostering employee engagement and productive employees starts with having supportive managers who go out of their way to create a safe environment . If you want to maintain a creative and innovative staff, your employees have to feel that it is ok to fail. If your employees feel empowered to experiment and try new things, they are not more likely to stay with your company, but chances are they will come up with exciting new ideas that help your business grow. Being overly critical or instilling a fear of failure will simply discourage your employees rather than motivate them and ultimately hurt their morale . Employees also want to know that your value their feedback . It’s also important to allow employees to be themselves. For instance, Whole Foods gives its employees the autonomy to wear what they please and freely present tattoos, piercings, and dyed hair, rather than enforcing a dress code. As a result, the company has one of the highest employee retention rates in its market.
By reflecting your business’s financial success in your employee’s salaries , you can let them directly experience how their hard work is helping your company grow. This will not only incentivize them to channel their work towards your company's success, but also motivate them to stay with your company as it continues to grow. By making your company’s payroll more flexible under different financial conditions, you can make your business more resilient and agile while also providing your employees with both compensation and motivation for all of their contributions. Furthermore, when looking to expand your business or make other important decisions, sharing your company's values, missions, and goals with your employees, will provide them with a better understanding of where the company is moving and give their performance a sense of direction.
Don’t be afraid to give your employees more responsibility and autonomy. By giving your employees more responsibility, you are allowing them to grow and acquire new skills. Provide your employees with training and educational opportunities and always hire from within when possible. Many employees end up leaving a company because they feel like they’re not learning anything. In fact, 93% of employees stated in a survey by Linked In that they would stay in a company longer if they felt that it had invested in their career and provided paths for professional development . By working career development and mentorship programs into your yearly budget, you can ensure that your employees overcome uncertainty and can see a clear path towards internal advancement.
In short, employees should be recognized for their achievements . Reward good work with annual salary increases and regular promotions . Furthermore, offering paid maternity and paternity leave as well as providing healthcare and financial aid for an emergency situation will help your employees feel comfortable at your company. Of course, there are other ways to show your employees that you care outside of monetary rewards . Celebrating birthdays , hosting out-of-office employee events, upgrading employee equipment, and recognizing achievements in front of the company will show that you actually care. At the end of the day, happy workers are better workers
If your goal is to keep employees for the long haul, it’s important not to burn them out. It’s key to offer generous paid vacation time and sick days to give your employees the rest they deserve. Maintaining a solid work-life balance will allow your employees to give it their all when they are on the clock. Even throughout the day, offering mini-break periods or team-building activities can keep spirits high and allow employees to catch their breath. Furthermore, unless your company requires a rigid 9-5 flexibility , it can be beneficial to be flexible with your workday. Allowing employees to work early or late and also offering remote positions can actually decrease absenteeism. Taking your employee’s specific needs into consideration will promote a healthy work environment , ultimately leading to a higher retention rate.
There’s no question that the longer an employee works at your company, the more value they provide. Take Tony Stark, for example. Tony worked with the Avengers as Iron man for over a decade, and in the end, saved all known life in the multiverse. In all seriousness, investing in customer retention will allow your business to maintain sustainable growth while reducing turnover costs. Of course, if you want your employees to stay, you’ll have to monitor their employee satisfaction at all times. With the information discussed above, you can start taking actionable steps towards keeping your top talent . Sources: Employee retention: The real cost of losing an employee | People Keep How to Retain Employees: 18 Practical Takeaways from 7 Case Studies | Snack Nation Workplace Learning Report | LinkedIn