How to retain great employees

It’s more cost-effective to keep an employee than to replace one. In fact, losing an employee will cost a company roughly 33% of the worker’s salary, according to research. Things like advertising the job, screening and interviewing applicants, hiring, and onboarding all cost the company time and money.

Read on to learn more about employee retention and how you can keep employees happy.

Employee retention refers to a business or company’s capacity to keep the employees they hired. It’s usually given as a percentage and can signal low turnover or high turnover.

Employee retention varies by industry. The US Bureau of Labor Statistics reports a typical turnover of 60% in the professional service sector and 20% in the public sector.

Regardless of your company’s sector, lowering your turnover rate and keeping employee morale high can lead to improved productivity, more involved workers, and a better bottom line.

47% of respondents in a survey chose employee retention and turnover rates as the top challenges in the management of today’s workforce. But why do these things matter?

The business has less stress, less time wasted, and lowered cost output when employees are retained instead of hiring and training new ones.

Low productivity can occur after an employee leaves. It may be obvious during the scramble to fill the position, which can cause dissent among employees who are left to fill the gap. This creates more tension and stress, which may push other employees to leave. You may be left with a vicious cycle of turnover. Losing an employee can also cause a company to lose knowledge.

So, what makes employees leave?

While exit interviews can help shine a light on this question, there are some common reasons why employees leave.

61% of employees in a survey said they left to get a higher salary. Other issues include boredom, management problems, culture dissatisfaction, poor work–life balance, feeling unsupported, overworking with limited advancement, no competitive perks or benefits, and no recognition in the company.

How can you keep employees happy and working for your company? Here are a few key strategies to boost employee retention:

Onboarding new hires

Your efforts to keep an employee should begin at the orientation or onboarding stage of the hiring process.

Give the new employee support while you educate them about your company, its policies, and culture. Let them know who to go to with questions and concerns. Give them all the tools they need to thrive in the company with ample training, feedback, and open communication.

Mentorship

Employees with a mentor tend to stay in a company longer. Mentors are more than just a welcoming committee; they offer insight into how the business is run and act as a sounding board to the employee’s thoughts and questions. Mentors can help guide an employee through the job while offering individualized answers.

Mentorships are perfect as part of onboarding but can also be done with current staff members from time to time to help retain job satisfaction.

Fair and competitive employee compensation

Compensation is one of the main reasons for employees leaving to go elsewhere. Paying competitive wages and adjusting those wages regularly is imperative. Even when the business can’t raise wages, you can still boost compensation with bonuses or improved benefits. These things raise morale and aid job satisfaction among employees.

Perks

Perks are little extras that can make or break employee morale. Remote work, flexible schedules, and paid lunches can add benefits to the workplace routine. Creating “little somethings” for your employees helps them feel seen and respected.

Wellness benefits

Wellness options, which can be mental, financial, or physical, are great business perks that are high on the list of what employees like to see.

From wellness expos to stress management programs and financial planning to retirement seminars, taking care of your employees’ needs with educational offerings and health wellness solutions can help them stay in the job much longer.

Better communication

Communication breakdowns are a fast way to raise tensions and create a workplace no one wants to be in. Whether it’s with remote or on-site workers, communication with management must be free and open. Connecting with your workers lets you stay abreast of tension before it escalates. You can also hear about any problems firsthand.

Steady feedback on performance

An annual review is helpful, but getting periodic reviews with a personal meeting has many benefits. Reviews can give an employee feedback while evaluating their goals and keeping them in the loop about problems that may be arising. It’s a great way to feed into the need for communication and ensure that both management and employee are on the same page.

Training and professional development

Employees are happier and more skilled when they receive training during onboarding and are offered continual training and other professional growth opportunities.

Frequently offering professional development courses ensures your employees are up to date on the latest trends and technologies. It also gives them the education and training they need to do a good job.

If your company is in an industry that can benefit from certifications, give your employees the opportunity to become certified in different aspects of their niche. This can boost your company’s reputation while increasing employee satisfaction.

Recognition and rewards systems

Never underestimate the power of “thank you.” Employees like respect, and these two words offer gratitude for a job well done. Saying thank you is a little piece of appreciation that can boost other reward programs to help spur innovation within the company. It won’t cost your company a thing, so it works for all budgets and teams. Employee recognition is so important. Research by Deloitte found that recognition programs lead to 14% higher productivity, engagement, and performance.

Work–life balance

Employees who feel like all they do is wake up, go to work, and come home to sleep are dissatisfied. They will seek a new job where there is a better work–life balance.

Workers need downtime. They need to know that their employer sees them as a person and not just a moving part of the industry machine. By encouraging workers to have breaks, boundaries, and personal lives, management is seen as compassionate.

Flexible work schedules

Now that business is getting back to normal post-pandemic, many employees still like the option of working from home, even if it’s only for a few days per week.

By offering a flexible schedule, you’re improving morale and creating a better work–life balance for your employees. This spurs healthy employee satisfaction and keeps them from quitting.

You can achieve flexible scheduling with remote or telecommuting options, fewer days with longer hours, or even flextime.

Effective change management

When there is turmoil or uncertainty in the company, employees want to look to management for reassurance and a solid plan for moving forward. This will help ease any anxiety about job stability.

Shifts in the organization can make rumors spread, leading to speculation and fear. The resulting havoc can have a domino effect on employees leaving in search of a calm atmosphere and security. Keep your team in the know, and be sure to give them a platform for asking questions.

Teamwork for all

Teamwork should be all-inclusive. Too often, businesses look to a select few for new ideas or solutions to problems. By creating a culture where everyone is open to sharing their thoughts and ideas, you’re allowing individual styles to come through and creating a way to see an issue from all sides. This type of teamwork can help the company and boost employee morale, leading to a lower turnover rate.

Milestone acknowledgment

Another great way to support employee retention is to celebrate milestones. While this could be showcasing a team or employee that closed a big deal or won an award, it can also mean shining a light on smaller achievements.

Creating a system where employees are noticed and brought into the spotlight can have a great effect on their morale, encouraging them to stay longer at your company.  Recognition can be as simple as a quick personalized email congratulating the employee on the achievement. You can also include a little perk, such as a paid lunch or a gift card.

Cultural fitness

Your company and its teams have their own expertise and cultural flow. Hiring employees that fit into that and mesh well will have a longer employee experience at the organization.

According to the Harvard Business Review, 41% of employers surveyed believed that just one bad hire would cost a business approximately $25,000 or more.

A hire doesn’t always work out, despite everyone’s best efforts. Being able to recognize this is just as important as pulling out all the stops to keep an employee.

When you know that it’s time to let someone go, remember to nurture the remaining workers and ensure a smooth transition to the hire who will take the vacant spot.

There are ways to tell if a hire isn’t going to work out. They display what is called “pre-quitting behavior.” This behavior involves signs such as lowered productivity, becoming less of a team player, reduced interest in company projects or events, coming in later/leaving earlier, and having more days off.

Conducting an exit interview with employees you let go is just as important as it is with those who quit. Understanding the employee’s mindset throughout their time with the company can help you develop retention projects.

For any employee retention strategy to be effective, bear the following five drivers in mind when creating it: strong leadership, good work–life balance, fair and balanced compensation, frequent feedback, and recognition.

A good way to formulate an employee retention rate is to take the number of employees at the end of a period (quarterly, monthly, etc.) and divide that by the number of employees who were there on the first day. Multiply the answer by 100 to get the percentage.

The seven stages of employee retention are attraction, recruitment, onboarding, retention, development, offboarding, and happy leavers.

Everyone in the organization is responsible for retaining an employee. This includes management, human resources, talent acquisition, hiring managers, and team leads. They are all part of the system that can develop employee morale and keep it high.

Noncompetitive compensation is one of the top reasons why employees are not retained. Those businesses that compensate fairly and provide additional perks and benefits have happier employees and lower turnover rates.