What is employee retention? Find our vest practices, examples & definition below
Retaining employees is just as important as keeping your customers. When your workers consistently leave, it reduces productivity and can even hurt morale. Just think — if everyone around your new employee keeps quitting, they might second-guess their position there. Worse, low retention hurt your business's culture and even hurt your bottom line.
Unfortunately, this is a growing concern for employers, especially amid the pandemic. One report shows 33% of millennials today are thinking about finding new jobs after the pandemic. And 91% of millennials expect to stay less than three years with the same employer.
So if you fail to entice workers, they're less likely to stay long-term. And this will end up costing you. One study shows the average employee exit costs 33% of their annual salary. But what can you do to stop this dilemma in your workplace?.
First, you need to understand why retaining employees should matter to your organization.
What is employee retention and why is it important?
Employee retention is a strategy employers use to keep workers in their company long-term. Measuring staff retention rates help companies determine whether their methods are working. When there's a high turnover rate, it signals an issue in the workplace or the recruitment process.
So why is employee retention essential to businesses? The top reason — it saves you money. Each time you lose a worker, you have to spend money to replace them. This includes expenses for recruiters, conducting interviews, onboarding, and training.
When a company struggles to retain its workers, it leads to numerous problems, including:
Loss of revenue
Finding a replacement can be challenging, especially when the talent is rare or in high demand. In some cases, it can take eight months for a worker to reach their full potential. And it can take a year or two for a new hire to match the productivity levels of the worker who left.
What are the top reasons employees quit?
Understanding why employees are leaving your organization is key to eliminating the issue. There are a variety of factors that can play a role in a worker's departure. But we put together a list of the top reasons why employees leave:
Salary and benefits. If the pay is too low and benefits are lacking, then it could deter workers from sticking around.
Feeling burned out. Overworking your employees is never a good idea. It hurts their productivity levels, and it can diminish their loyalty and commitment to your company.
Limited opportunities for advancement. Many employees are itching to move up the "corporate ladder." If you don't present opportunities to do so, then they'll view their role there as a dead-end.
Poor work-life balance. If the lines of work and home are consistently blurred (i.e., emailing and calling after-hours), it can make it difficult for employees to turn off and enjoy life outside of work.
Lack of recognition. A lot of employees work hard for their employers. If you're not showing appreciation for their efforts, then they'll feel you don't value them.
Boredom. It's possible for work to become a bit boring, especially if it consists of mundane, tedious tasks. Or if there are no opportunities to work on projects that expand their skills and talents.
Poor relationships with management. Some managers get a bad rap for being overbearing, unempathetic, and unavailable. These can all hurt employee-manager relationships. As some say — people don't quit their job, they quit the boss.
Concerns about the company's future. If the organization feels like it's on shaky grounds, then it may make workers feel uneasy about staying. This can happen when there's talk about the company's financial health or direction.
Poor company culture. Toxic workplaces make it difficult for employees to commit long-term. This includes micro-managing bosses, bullying co-workers, and office politics.
Examine your workplace to see if you notice any of these problems. Sometimes, these things can go unnoticed by the higher-ups. So make it easy for employees to report issues within the workplace.
What are the main drivers of employee retention?
Can you guess one of the main drivers of employee retention? If you thought salary — think again. It's a common misconception that the more you offer an employee, the happier they'll be (and the longer they'll stay). But a healthy paycheck isn't enough to keep today's talent around.
If you want to appeal to millennials and Gen Z, then you want to focus on learning and development. One report shows 94% of employees say they'd stay with a company longer if it invested in helping them learn.
And 27% of Gen Z and millennials say the top reason for quitting a job is lack of learning and growth.
Other reasons employees stick with employers include:
Believes in the vision and mission
Excited about the work and challenges
Career growth and development opportunities
Fair pay and incentives
Working with great co-workers and management
Supportive team leaders
Quick tip: Survey your long-time employees to learn why they're with your company. This will give you insights into how to improve the workplace so others will want to stay longer too.
How do you retain employees?
Retaining employees is easier when you understand why they're leaving. So before you delve into developing an employee retention plan or implementing retention strategies, examine your workplace.
You can use surveys for your current workers and even attempt to ask those who've quit why they left. You may find a recurring theme, such as not offering regular pay raises. Or maybe certain managers are overbearing and need replacing or training.
So before you move on, make sure to get to the bottom of the "why" behind your employee retention issues.
What is an employee retention plan?
An employee retention plan is a program employers use to reduce turnover rates. To develop a worker retention plan, you should conduct an in-depth evaluation of your organization.
Here are several steps to take before implementing employee-retaining strategies:
Calculate your employee turnover rate
Examine your leadership (survey workers to see the sentiment for each manager)
Analyze your benefits, salary, and pay increase schedules (maybe it's time for improvements)
Evaluate your work environment (is it time for a makeover with fewer walls and open spaces?)
Go over policies to see if work-life balances are out of whack (do managers message workers after-hours?)
Your company culture plays a major role in employee satisfaction. Call a meeting to develop a culture that resonates with what your company represents.
For instance, do you want to cultivate growth? Or maybe you want to create an open and collaborative workforce. Whatever the goal, design your strategy with those things in mind.
7 employee retention strategies to try today
So you're dealing with poor employee retention, what do you do? Here's a list of worker retention strategies to implement within your organization.
1. Offer competitive salary and benefits
It's not a top priority for millennials and Gen Z, but it's also not a deal-breaker. No one turns down a position or leaves a company solely because the salary is too high or benefits are too great.
They leave for a variety of other reasons.
Offering great compensation plans shows you value your workers, which is always a great first impression. It's also worthwhile setting up regular performance reviews and pay raises. This will give your company a competitive edge (and prevent workers from leaving for better pay).
2. Improve your hiring process
There are two ways you can enhance your hiring process:
Be precise about the type of employees you want to hire, so your recruiters will weed out those that aren't the right fit.
Extend employee onboarding, so they're trained longer and can hit the ground running.
It's also good to be honest with a new hire before bringing them on board. So don't sugarcoat their tasks and role. When you do that, they're more likely to leave when they see it's tougher or less desirable than what you lead on.
The goal is to hire workers that are a good fit for and desire the roles you're trying to fill. Unfortunately, 35% of hiring decision-makers expect more workers to quit over the next 12 months.
Why? Likely, because they knew the people they hired weren't the best match. Or had warning signs of being quitters.
3. Alleviate employee pain points
What's causing employees to quit in your organization? If you conduct a survey, you may find a trend of pain points. For instance, in the airline industry, there's a shortage of pilots due to onerous schedules. They spend a lot of time in the air, in hotels, and around strangers.
This isn't appealing to someone who has a family or dislikes being away from home all the time. In turn, more airlines are offering higher salaries. They could also change the way they schedule pilots, so it's more family-friendly. By allowing pilots to be home every night, it can entice more people to become an airline pilot.
You can do the same in your organization. Find ways to ease or even eliminate frustrations.
4. Offer ongoing training and paths to advancement
Let's not forget about one of the top priorities of today's young workforce — education. Consider offering workshops, seminars, and courses to elevate their skills. Then be sure to promote from within, so there's a clear path to advanced positions.
This will help employees envision a future within your organization. You can leverage the knowledge of team leaders and SMEs (subject matter experts) to head the training lessons. Assigning mentors to workers can also strengthen bonds within the workplace.
5. Leverage technology to streamline work
No employee wants to spend hours on tedious, mundane tasks. With the right technologies, you can delegate these duties to software. It's a win-win — your workers will appreciate it and it'll help improve productivity levels.
You can find tools to enhance the management of projects, time, customer relationships, sales, and databases.
6. Offer flexible work schedules
Allowing employees flexibility over when and how they work can promote better work-life balance. It also makes them more productive, since they're choosing when and where they work.
Not everyone's cut out to sit at a desk from 9 a.m. to 5 p.m. Some perform better at night. Others are most productive working in chunks or time blocks throughout the day.
It's difficult to accommodate everyone in the workplace. So enable your workers to telecommute several days each week or choose their own work hours and days.
7. Incorporate a recognition and rewards system
Recognizing the hard work your employees put in makes it worthwhile. This is especially true when there's a reward involved. Now, this doesn't have to be anything expensive — instead, you can send a handwritten note or card.
Or gift a personalized basket of wine, treats, or other items. If you have conversations with your workers, you can learn more about them. This will make it easier to find the perfect gift.
Ideally, you want to acknowledge large and small accomplishments. Again, you can keep it simple. Send an email showing gratitude for their achievements.
Sometimes, it's the small things that matter most.
Stop losing employees for preventable reasons
It's not possible to retain 100% of your employees all the time. But this doesn't mean you can't find ways to reduce the turnover in your workplace. With these tips, you can begin turning the tide and retaining more employees.
It's also helpful when you have the right tools and processes in place to improve work-life in your organization. For instance, you can use Deputy to streamline the scheduling process.
This is helpful if you're planning to adopt a more flexible schedule. Or even if you just want a better way to manage current schedules. With our platform, you can reduce frustration for everyone — the managers in charge of organizing shifts and the shift workers.
If you'd like to learn more, then check out how Deputy can help lower your turnover rate on our blog.