According to Gallup, 51% of employees are looking for a new job and 34% of employees hope to leave their current role within a year. The statistics tell us that if businesses want to not only hire the best talent for their organization, but keep that talent around for the long-term, they need more effective employee retention strategies.
Employee retention is all about holding on to the people that you’ve worked hard to recruit into your network. This might seem like an obvious factor for companies to consider, but Watson Wyatt recently revealed that more than 50% of employers have no strategy for maintaining their employee retention rate.
With 27% of employees changing job each year, 46% passively looking for new careers and 17% actively job-hunting, retention is more important than ever before. The key thing to remember is that employee retention rate isn’t exclusively based on compensation issues. Instead, it often hinges on the ability to keep employees satisfied with tactics for growth, security and appreciation.
Why is Your Employee Retention Rate Suffering?
Today, 59% of employees would abandon their current position, given the chance. To ensure an effective employee retention strategy, businesses need to listen to the needs of their employees and implement strategies for success all the way from onboarding to exit interviews.
Approximately 88% of employees leave their roles for reasons other than pay, but 70% of managers think that employees leave entirely for salary-related reasons – clearly, there’s a disconnect here.
Rather than assuming you know what’s going on in your workforce, a good employee retention strategy should begin with a solution for measuring metrics and information that shows why you’re losing your employees. Common reasons for this turnover often includes:
- Mismatched company culture
- Not enough feedback
- Limited growth and advancement opportunities
- Lack of recognition or work/life balance
- Loss of trust or confidence in senior staff
By developing an employee retention strategy that measures reasons behind turnover, employee engagement and other essential elements, you can reduce cost-per-hire significantly.
We’re going to look at the essential employee retention strategies that improve company culture and reduce cost-per-hire, while also considering the methods you can use to measure the impact of each tactic on your business.
1. Use Metrics to Motivate & Engage Employees
Many employee retention strategies focus on the benefits of encouraging employees with feedback. While positive feedback can motivate employees into doing their best work, constructive criticism can help to rectify issues in the workplace. Both forms of feedback boost engagement, which is key in a world where 51% of the workforce is disengaged – costing businesses up to $550 billion each year.
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People have a desire to feel they’re succeeding in their goals, and vague feedback isn’t always enough. Find a way to share key metrics like profit and loss, customer engagement, and brand growth with your employees through your business intranet. This will help to not only engage your employees, but establish pride in your company culture.
As engagement begins to increase in your company, you’ll find that productivity starts to grow. Measure the speed at which projects are completed in your company and whether your business becomes more efficient over time. You can also conduct surveys and polls to ask your employees whether they feel they’re getting the right information with which to measure their performance.
2. Encourage a Healthier Work/Life Balance
If you want to ensure that your employees continue to stay motivated and work efficiently, it’s important for you to be an advocate for good work/life balance.
Since today’s workers are more concerned about flexibility than high wages, work/life balance solutions such as opportunities for remote working or support for good health can help to make your business more appealing to job candidates.
Discuss the idea of “work/life” balance with people in your company and find out what appeals to them most. When you implement your new flexible strategies, you can measure the outcome by looking at a range of positive metrics, including:
- Amount of time it takes to hire and onboard new talent
- Rate of turnover with historical benchmarks and future predictions
- Involuntary vs. voluntary turnover rates
3. Create & Emphasize Opportunities to Grow
Though Millennials are some of the most notorious job-hoppers in the current market, 90% claim that they would happily stay in a job for the next decade if they knew they’d be rewarded with upward career mobility and annual raises.
Providing opportunities for your employees to grow and evolve in their roles not only helps to improve retention, but it also significantly reduces cost-per-hire. After all, the more you use in-house training solutions to boost your employee retention rate, the more you develop highly-skilled staff members who can naturally take over from high-ranking executive employees when new positions open up. By implementing training programs and promoting from within, you create powerful incentives for team members to stick with your company.
Employee satisfaction is a good metric to measure when it comes to figuring out if your growth and training opportunities are working. Aside from a positive impact on the business overall, employees consider training solutions to be an investment in their future, which creates a stronger level of loyalty and trust in you as their employer.
You’ll find that the more you provide opportunities for growth, the more you’ll hold onto the people who might otherwise feel that their only way to continue expanding is to take a career elsewhere.
4. Empower Your Team
Today’s employees want to work for a company that understands, trusts and respects them. In fact, 59% of business staff say that the thing they like most about their employer is their ability to create a pleasant working environment.
Empowering your team at work is essential to improving your employee retention rate and minimizing cost-per-hire. By empowering your team, you allow each member of staff to take full responsibility of their position within the workforce. This means that you’re not micro-managing and you enable your company network to innovate, create and take chances where necessary.
One of the simplest ways to empower your team is to give them guidelines providing insight into which circumstances they can make decisions on without seeking help from senior staff.
Another solution is to enhance your employee advocacy programs and incorporate social recruiting strategies. Asking your employees to seek out future team members on your behalf is a wonderful way to reduce the price of searching for new talent, maintain a strong company culture and show your team that you value their opinion.
As you incorporate new empowerment solutions into your workplace, you should see that your retention rates continue to grow, while turnover starts to drop. Examine your employee retention strategies and figure out how many of your new hires come from social recruiting strategies. Try to measure how much you spend on those strategies, compared with traditional recruiting methods.
5. Encourage Regular Feedback
Finally, one of the top five reasons employees say they love working for small businesses is that they feel their input matters. If you’ve implemented a strategy for empowering your employees, then you’ll have already begun to show them that you respect their opinion. One of the easiest way to promote growth and ensure that your employee retention strategies are working is by encouraging feedback.
High levels of employee engagement can lead to 2x more revenue, and a good feedback strategy helps to improve that engagement. With a solution that allows your employees to offer constant feedback, you can ask important questions about your employee retention strategies, find out if you’re giving staff the right tools for success and discover what you might be doing wrong in your business.
Ultimately, it’s all about creating a corporate culture where your employees feel comfortable providing their thoughts and opinions on your business. By working on that culture, you’ll improve the chances of your workforce wanting to get involved with employee advocacy initiatives. On top of that, you’ll end up with employees who are loyal to your brand and keen to stay with you for longer.
Conduct surveys regularly to boost the feedback habit, measure the results of your social recruitment and advocacy strategies and watch your company culture thrive.
Boosting Employee Retention Rates
Improving your employee retention rates might not be easy, but it’s something that companies need to consider if they want to stay ahead of the competition. It’s hard to implement new strategies for promotion and growth if you’re constantly spending more on cost-per-hire and fixing the productivity and moral problems that come with frequent turnover.
Ultimately, it’s not the salary or bonuses that matter most when it comes to employee retention – it’s the ability to engage your employees in an atmosphere that offers respect, room for growth and empowerment.