Everything You’ve Wanted to Know About Employee Retention and How to Improve It
As your company grows and requires more personnel, it can sometimes feel as though you spend all of your time recruiting new talent.
Although hiring the best of the best may be good for your organization, all of that talent will be wasted if you don’t retain your top employees. To remedy this, beginning to view hiring as the first step in a years-long process of cultivating and retaining employees can make a big difference. Investing in talent now will pay dividends as you build a loyal workforce willing to go above and beyond for your company.
Employee Retention and Why It’s Important
Employee retention refers to the amount of time your employees stay with your organization. If you don’t know this vital statistic, now is the time to calculate it. Once you have it, compare with other companies in your industry to see how you stack up, as some industries have much higher turnover than others (see: the tech industry). On average, 50% of employees leave an organization within 2 years.
Why is employee retention so important? For every employee who quits, you need to spend time and money to hire and train a new person to do his or her job. Employee turnover results in a loss of nearly 11 billion each year, says the Bureau of National Affairs. The process of retraining a new employee takes weeks or months, but achieving the same level of productivity, comfort, and synergy with other team members can take even longer, often requiring a year or more. That’s why it is essential that your organization remain focused on investing in employee retention strategies.
5 Tips to Improve Employee Retention
Every organization should outline a strategy to address employee retention. Consider these tips:
- Gather information about employee satisfaction. Would you develop and begin selling a new product without doing basic market research first? Of course not. Treat the employment market the same way. Conduct a climate survey, solicit opinions from current employees, and take exit interviews seriously as an opportunity to learn more about what you’re doing right and wrong. Once you know what your employees love and what they wish was different, you can develop specific targets for change.
- Develop clear expectations. A recent Gallup poll found that fully half of U.S. workers don’t know what their employers expect of them. Beginning with an employee’s first day, set clear and realistic expectations for performance. Consider this a two-way conversation in which you collaboratively set goals with your employees, which spurs motivation to succeed.
- Provide professional development opportunities. After hiring a new employee, the focus is often on the first 3-6 months in which the person will get “up to speed.” That’s a huge mistake. Clarify a long-term strategy for that employee’s professional growth, and he or she is significantly more likely to stay with the company. This might include mentorship opportunities, continuing education, leadership workshops, or opportunities to attend professional conferences.
- Promote a vibrant company culture. Company culture is essential, particularly among younger workers. Over 80% of Millennials expect companies to commit to employee development and engagement. If you don’t have a clear mission or opportunities for employee growth and connection, now is the time to craft a narrative that gets employees enthusiastic about the work they do for your organization. Creating a feeling of progress, community, and mission generates greater employee satisfaction.
- Offer great benefits. Employers often mistakenly focus on salary as the leading contributor to employee satisfaction. While many workers wish they were paid more, other aspects of the benefits package may be even more compelling. Consider flexible work schedules, telecommuting opportunities, more generous paid family leave, and boosting vacation time.
Dos and Don’ts of Retaining Top Talent
Do: pay attention to online review sites. These sites provide a mirror for you to examine your successes and failures as an employer. Read reviews with an open mind to identify ways to improve your company culture.
Don’t: overburden employees. Employees are increasingly concerned about long working hours and work-life balance. If you relentlessly focus on the bottom line, employees will quickly burn out and move on.
Do: become more flexible. More than 50% of employees say that flexibility is the biggest driver of their decision to stay with an organization.
Don’t: be stingy with feedback. Most employees genuinely want to do good work, but sometimes they may need a little more guidance and feedback. Institute a frequent review policy whereby workers can receive feedback about their strengths and areas for growth.
Do: invest in your company’s leadership pipeline. Bad managers are a frequent criticism among employees who quit to find other work. Investing in your leadership pipeline will pay dividends both in improving supervisees’ satisfaction as well as identifying lower level employees with great management potential.