When employees leave an organization, the costs of recruiting and training their replacements can be staggering. According to Employee Benefits News, it costs, on average, 33% of an employee’s yearly salary to replace them. This can be especially daunting when an employee leaves the company just a few months into their employment with you.
However, finances are not the only concern when an employee leaves; it could also influence others to leave the organization as well. Even if other employees choose to stay, they may find themselves taking on extra work due to understaffing, which can lead to burnout and lower productivity.
The best way to prevent this scenario is by implementing a good employee retention plan. Here is a look at some of the elements that go into an effective strategy for improving a low employee retention rate.
What Is Employee Retention?
Employee retention refers to the percentage of employees who stay with an employer during a particular period of time. A higher employee retention rate indicates a company that has more long-term employees, while those whose employees frequently leave the organization will see a lower employee retention rate.
In general, an employee retention rate of 90% or higher is considered good. However, this will depend on the size of the business and the industry.
Improving a Low Employee Retention Rate
If your employee retention rate is falling short, here are some steps you can take to improve it:
Launch an Employee Recognition Program
Many employees leave their jobs because they do not feel appreciated. Recognizing their efforts is a great way to encourage them to stay on board, whether you give them public acknowledgment, hand out gift cards or treat them to lunch from time to time.
Be sure that any thanks, praise and compliments are specific and personal, taking care to explain the impact of their work on the team or company so they can see how they fit into the bigger picture.
Bigger employers may consider implementing a formal recognition platform that uses a points-based reward system allowing employees to earn rewards that they find meaningful.
Offer Opportunities for Growth
If employees are unable to see a future with your company, there is a much greater likelihood that they will seek opportunities elsewhere. Establish a career development plan with every employee. Find out what their goals are for the next five years, and let them know what they can do to reach them.
If, for example, an employee says they would like to be a manager in the next five years but you think they need outside training, be upfront about that. Help them create a step-by-step plan outlining how they will reach their goals with your company.
Solve Your Employees’ Pain Points
One of the most important components of any employee retention plan is finding out why current and previous employees are leaving. Design a survey or conduct in-person interviews asking employees who have left the company about their motivations and look for trends.
There is not much that can be done about those who leave for personal reasons, such as a better-earning spouse’s relocation, but if several employees mention factors such as outdated technology, a desire for greater responsibilities, or inadequate insurance, you will know where to focus your efforts on retaining current employees.
Businesses should also create a culture where their employees are comfortable providing suggestions and sounding off about issues that matter to them. One way to encourage feedback is with surveys that ask some yes-or-no questions about different aspects of their job and job satisfaction. Rating scales can also be used, such as asking how likely an employee is to leave, on a scale of 1 to 5, if they receive a better offer.
Some open-ended questions that give employees a chance to sound off could include what changes they would make at the organization if given the chance and under what scenarios they could envision themselves leaving the company.
Improve Manager Training
Many people who have left their job or are considering doing so, cite a bad manager as the main source of their unhappiness. A lack of support from managers can affect every aspect of a business; consider investing in effective management training geared toward helping them better support their employees.
In addition to helping managers support the development of those on their team, the right training can help them learn better techniques for letting employees know when they need to make certain changes or improvements without making them feel unappreciated, which can further boost retention.
Offer Better Pay and Benefits
The main reason people go to work is to provide for themselves and their families, so ensuring that your salary and benefits are competitive is one of the best ways to keep them on board.
Right now, the job market favors candidates. There are many job openings that companies are desperate to fill, and some are raising their salary offers in hopes of attracting top talent. It has never been more important to make sure that your employees’ compensation levels are competitive for the marketplace and industry in which you operate. You should also be offering promotions that are meaningful in terms of both salary and responsibilities.
“Quality of life” work benefits can also enhance your overall compensation package. This might include educational assistance in the form of tuition reimbursement or paid certification programs. Annual retreats for top performers and equipment upgrades can also be helpful.
Many companies are offering increased opportunities for telecommuting. The pandemic has demonstrated how modern technology can help individuals carry out their roles from home, and it is a benefit that increasing numbers of employees appreciate.
Flexible schedules are also highly coveted, allowing people to determine the start and stop times that work best for their personal responsibilities and commuting concerns while ensuring they work a sufficient number of hours.
Request an Employee Benefits Consultation with Business Benefits Group
Keep your current talent satisfied and avoid the expenses of recruiting and training new employees with help from a professionally designed employee retention strategy. Contact the experienced consultants at Business Benefits Group (BBG) today to learn more about retention services.