When consultancy firm KPMG asked more than 300 CEOs about the greatest threat to their companies’ growth through 2023, the No. 1 response — from among a dozen options — was “talent risk.”
What’s interesting is that talent risk was at the very bottom of that perceived threat list just six months before.
Managing employee retention involves strategic actions to keep employees motivated and focused so they elect to remain employed and fully productive for the benefit of the organization.
A comprehensive employee retention program or various employee retention strategies can play a vital role in both attracting and retaining key employees, as well as in reducing turnover and its related costs.
With the onset of remote work, more people are keeping their jobs in the 5-year bracket already. Although there are big advantages of working remotely, there are some pitfalls as well, and employee retention is one of the challenges for many companies. Job burnout is now an emerging reason why a lot of employees consider changing their jobs.
That brings us to our focus: Why are more people not talking about the connection between remote job burnouts and employee retention?
What is Employee Retention?
“Employee retention” refers to the effort taken by organizations to hold on to their employees, and given the current job environment, employees have established that they are assets and that their expertise is the need of the hour.
Most employees are on the lookout for new opportunities with bigger and better benefits. While there are certain industries that thrive on a high turnover rate, and hence, actively hire and fire employees, it has been found to be more economical and productive to retain top performers.
The average employee turnover rate according to LinkedIn is around 10.9% and anything between 10% - 15% is considered normal.
The commonly used formula to calculate the employee turnover rate is to first consider a specific period of time and then dividing the number of employees who left the organization in that time period by the number of employees present on the first day of the considered time period. This value then needs to be multiplied by 100 to get the final turnover rate.
Why Should You Have An Employee Retention Strategy?
COVID-19 has quite possibly changed the working norms forever. Employers, in turn, have begun to look inward in order to analyze how they can hold on to their prized assets i.e. the employees, to reduce their employee turnover rates.
Retaining existing employees is more cost-effective and time-effective than hiring new employees. With regards to the former, it has been said that getting a new recruit on-board costs a company 2.5 times the salary of an existing employee.
This implies that it is cheaper for an organization, in the long run, to retain people already on the payroll as opposed to employing new people., Onboarding new employees consumes time, money, and manpower resources.
A considerable amount of time is spent in bringing the new recruits up to speed, teaching them the run of the company, and getting them integrated with the other members in their workforce.
This time could be put to better use to increase the productivity of the company.
According to the Society of Human Resource Management, one of the best methods to increase employee retention is to increase their levels of job satisfaction.
This encompasses things like good pay, good treatment, good professional relationships, job security, and providing a forum for the employees to be able to showcase their skills and abilities at a professional level.
Top 13 Employee Retention Strategies to Win the War for Talent
There are many employee retention strategies that organizations can implement in order to keep employees motivated and engaged. These are mentioned below :
1. Provide Positive Feedback
Feedback is extremely important for the growth of both the employees and the employers. According to the Harvard Business Review, the ratio for constructive/positive comments to negative comments is nearly 6:1.
It is necessary for the employee to feel appreciated at work, and positive validation does just that. Positive feedback should be given frequently as it motivates the employees to perform better and to work on the negative feedback they receive.
Similarly, having an employer or an organization listen to feedback, both positive and negative, is imperative. An acknowledgment of this makes the employees feel like they have a voice and are being heard by their superiors, which is a major reason for them to stay in the organization.
2. Allow For Growth Opportunities
Companies that provide their employees with a variety of training seminars, workshops, and additional resources to develop their skills are always preferred and tend to have a higher employee retention rate. A study by LinkedIn Workplace Learning Report states that 94% of the workforce stays with the company for longer if it invests in their professional development.
Providing a clear career path and investing in employee L&D can be one of the best employee retention strategies. Giving them opportunities to work outside their roles and take on additional work through promotions makes employees feel more valued, and provide them with incentives to stay on.
3. Encourage a Healthy Work-Life Balance
With remote work a necessity, organizations that emphasize the importance of a healthy work-life balance are very important. This shows employees that their superiors actually care about their well-being.
Encourage a healthy work-life balance by establishing regular work hours and policies for working on the weekends. If you see an employee working extremely well and meeting his/her deadlines frequently, give them some time off as a reward. It is one of the tried and tested employee retention strategies that never disappoints.
4. Flexible Work Arrangements
With the pandemic still in full force in many countries, people continue to find it uncomfortable to go back to work. According to a survey by Robert Half, one in three people would look for a new job if their employers made it mandatory to return to work full-time.
By making this return optional and allowing employees to work from home for as long as they need, employees will feel safer and prioritized.
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5. Avoid Sudden Workplace Changes
Big changes always take time to get used to, especially if they are at your place of work. Make sure to keep your employees updated on any changes, big or small, and take time implementing these changes, so everyone can adjust to them.
Big changes can seem overwhelming to many, so taking small steps to reach a big goal is sure to work.
6. Connect With Your Team
Working from home has definitely created a gap between team members. Take time in the week to have an informal session with your employees to see how their work has been progressing and if they need any help, professionally or personally.
Developing connections and communication between employees encourages positive growth, and breeds trust, harmony and loyalty amongst employees. Some ways to bring teammates closer in the virtual setup include playing online games and having happy hours.
7. Foster Respect in Your Workplace
Any organization that makes its employees feel respected automatically fosters loyalty. This can be demonstrated by treating everyone equally irrespective of gender, age, and socioeconomic status.
Even small gestures like saying “good morning” and “thank you” make the receiver feel respected and seen. If the general environment within an organization is one of respect and trust, the overall image of the brand improves, and employees would rather stay than look elsewhere for potential jobs
8. Bring Out Your Employees’ Creativity
Everybody needs to be pushed to some extent to improve their work. Allow your employees to voice their opinions on how to handle situations and how best to deliver results.
This not only helps to break the monotony of routine work-life but challenges the employees themselves to think out of the box. Providing new scope for work to your employees goes a long way in creating trust. It shows that you’re observing their progress, and they’re seen, and thus - they matter.
It also creates feelings of security for an employee. Knowing that their progress is not unseen, means there is scope for their professional growth in the company.
9. Offer Competitive Salaries
One of the best employee retention strategies is offer competitive wages. A good salary is the best perk there is when it comes to staying at your current job or looking at other options.
Offering additional monetary perks like pay-hikes for good performance, a good health plan or a retirement package can serve as the ultimate glue to hold employees in place as well as providing them with an incentive to perform better.
Here’s how to create a competitive pay for your company:
Research median salaries
Determining the median salary can give you an idea about a candidate’s expectations in terms of compensation. Look at the average wage paid by companies in your industry and location for similar roles. Sometimes such information is also available from the Bureau of Labor Statistics.
Research local market
Another way to decide on salaries is by researching the local market. Most of the salaries are set keeping in mind the cost of living and economic fluctuations in the country. Therefore, to hire the best candidates, you need consider such factors and provide compensation that matches, if not beats, your closest competitors.
Experienced employees charge more since they bring value to the company. If you plan to hire a fresher, expect the competitive pay to be relatively standard across the industry. However, for senior positions, it can be a wide range based on experience (also known as DOE or depending on experience) and the role that is being filled.
Consider annual pay hikes
Money is a big motivator for people to work. Giving an annual pay hike or bonus is a reward that most employees expect and also ensures salaries remain competitive. When deciding salaries, include aspects like the growing cost of living, seniority, and performance of individuals.
10. Make Resting Period a Part of Your Work Culture
It can be difficult to separate work from your private life when working from home. This can lead to burnout which is dangerous, yet avoidable.
Nowadays, organizations are emphasizing the importance of taking a break from being available 24/7. Rather, the only work to be done is to switch off from work and take time for themselves.
This serves as a serious energizer for employees as they are able to focus better and produce better results after the rest period.
11. Provide Mental Health Support
Mental health is not always prioritized in fast-paced work culture, although it is slowly gaining traction.
Organizations that offer free therapy and counseling to their employees are held in high regard because this shows that they care for the overall wellbeing of their employees, and do not only focus solely on material rewards.
Since therapy is expensive, having the ability to reap its benefits without feeling the pinch is a huge plus point in the employer’s favor.
12. Create a Clean and Safe Environment
One of the things this pandemic has made us realize is the importance of hygiene both personal and in our environment.
By ensuring a safe and clean environment, employees will feel more comfortable when they start coming back to work.
13. Earn Trust in Your Employees
‘Trust’ always has been and always will be a huge factor that employees consider when they begin to evaluate their current place of work.
If they feel they can come to you with any problem, with no fear of repercussions, and if they can see you trust them, you, as an employer, will earn their trust and then some.
They should also believe that you have their best interests at heart, so making them aware of organizational decisions and helping out whenever you can is a sure way to help retain an employee.
Last 2 Cents
With these 13 employee retention strategies, any organization can easily keep a happy workforce and retain them for a longer period of time.
Ultimately, as long as they see wholesome growth and benefits, employees of any company will be tempted to stay on, improving your company’s brand image as well!