With the Great Resignation in full swing, companies are struggling to attract new talent. Many workers have redefined what matters to them in the wake of the pandemic, leaving a growing number of people seeking work that offers better working conditions and compensation. It has never been more important to keep valued employees satisfied and motivated to stay with the company in the long term.
Although conventional wisdom may suggest that paying employees more money is the best way to keep them on board, there are several other factors that drive employee retention. Many companies are assessing these factors and working to develop employee retention strategies to help reduce turnover. Here is a look at what employee retention strategies entail and what components make them successful.
Employee Retention Strategies: The Basics
Turnover is the number of employees who leave their job over time. Some industries will naturally have higher turnover, so what constitutes a good rate varies among the various fields of commerce. Although there is not much that can be done about those who leave their job involuntarily, there are plenty of steps businesses can take to reduce the number of workers who leave voluntarily.
Employee retention can be thought of as being the opposite of turnover in the sense that it refers to the number of employees who stay with their company across a set period of time. An employee is generally only considered retained if they are productive, engaged and not seeking other work.
An employee retention strategy is a plan that businesses develop and employ to reduce turnover, increase retention, encourage employee engagement and prevent attrition. Although some degree of turnover is inevitable in every business, the right retention strategy can minimize voluntary turnover and save businesses significant time and money. Hiring and training new employees can be considerably more expensive than investing in a good retention strategy that keeps current employees on board.
What Are the Components of an Effective Employee Retention Strategy?
Here are the areas of the employee experience that deserve the greatest focus when devising an employee retention strategy:
Businesses should develop a culture that will inspire their employees to stay with them. Nearly half of all individuals who are seeking new jobs cite company culture as the primary reason for leaving their last job, making this a worthwhile element on which to focus. With a strong company culture, everyone at the organization will understand the expected behavior and outcomes, and act accordingly.
Many employees, particularly millennials, are looking for jobs with opportunities for professional development. Showing employees that they have a chance to learn and grow at the business may inspire them to stay with the company in the long term.
Ensuring an organization has a positive work environment can be a very cost effective way of keeping employees satisfied. This may mean setting up more quiet spaces where workers can focus or opening up office spaces to foster collaboration. Some businesses are finding success offering work from home options and flexible work hours that give employees the opportunity to work how and when it suits them.
Rewards and Recognition
Rewards and recognition play a major role in employee retention strategies; employees who feel that their hard work is not being recognized are more likely to leave an organization. Ensure employees feel recognized and valued by publicly acknowledging their achievements, celebrating milestones and offering rewards.
One effective way of encouraging employees to stay with a company is by offering competitive employee benefits. Health care may be the gold standard, but other benefits that align with what an organization’s employees value can be very effective in increasing employee satisfaction. This may mean offering wellness programs, fertility assistance, college tuition reimbursement and other perks that employees value.
The Benefits of a Good Employee Retention Strategy
Although the main goal of any employee retention strategy is to keep valuable employees on board, effective risk retention strategies also provide businesses with many other benefits. These include:
More Productive Teams
Companies that are successful at retaining their employees benefit from having a team of workers who know their roles and work well together. This means they can achieve greater productivity. Companies with more turnover, in contrast, experience lost productivity due to the continuous need for onboarding and training.
In addition, because they frequently operate with reduced staff, their remaining employees are frequently burned out and are required to work excessive overtime, resulting in missed deadlines, delays in work and lower-quality output.
Improvements in Customer Experience
The perceptions that customers form based on the interactions they have with an organization are highly influential in their retention, recommendations and referrals. Unfortunately, turnover can have a negative effect on the customer experience.
Companies with unhappy employees often have a negative atmosphere, and the revolving door can prevent bonds from forming between clients and employees. Another potential issue is that new employees may take longer to understand their role. As a result, they can be slower in doing their work and struggle to solve problems, resulting in negative customer interactions.
It may not be surprising that better employee retention can reduce the costs involved in advertising new positions, interviewing and screening employees and onboarding and training. However, there are also many hidden expenses that come with higher turnover, such as lower engagement and customer service issues, that also have a tangible effect on the bottom line of the business.
Greater Employee Expertise
As employees work with an organization for a longer time, they develop a greater chance to form deeper expertise in their field. Their longevity allows them to understand the nuances of the business in ways that new hires cannot, enabling them to provide greater value and be more invested in improving the organization’s outcomes.
Learn More About Employee Retention Strategies
Employee retention efforts can have a significant effect on the success of a business. Contact the benefits consultants at Business Benefits Group (BBG) today to discuss your goals and find out how our custom strategies can launch your business to new heights.