One-quarter to one-half of all employees are planning to quit their job this year, depending on which survey you look at. These record numbers of resignations have many employers petrified that they’ll lose their best talent. Employee turnover costs companies millions of dollars in direct costs for things like recruitment, replacement, and training. It also carries a heavy cost in indirect losses of productivity, team disruption, and quality problems—it takes time for a new hire to get up to speed. For all of these reasons, it’s time to buckle down and get serious about retention.
Count the (Hidden) Costs of Employee Turnover
You already know that employee turnover is costing you money. According to Gallup, replacing an employee costs at least one-half to two times that person’s annual salary. These are hard costs that drop straight to your bottom line. But what about the hidden costs? Consider these questions:
- How much stress and poor performance are created when other employees have to pick up the workload of someone who leaves?
- How many customers do you lose when stressed-out employees give poor service?
- How many other employees might be lured away by an employee who leaves?
- How many employees start to think about other options when a valued friend or trusted colleague changes jobs?
Having put things in perspective, prioritize talent development. Investing in your people’s growth is the best way to keep them loyal and productive.
7 Employee Retention Strategies that Stop Employees from Quitting Their Jobs
Maintaining a stable workforce is a key management issue. The first thing you need to know is, it’s not just about the money. Compensation is important to people, of course. But keeping good employees involves important intangibles such as having a safe, pleasant work environment, recognition for accomplishments, and family-friendly work schedules and benefits.
There are many reasons employees leave a job. Some are out of your control, but you can take action on the majority of them. Here are seven problems and the solutions you can implement:
1 – Lack of job satisfaction.
Employees leave jobs because they are unrewarding.
Solution: Talk with employees to find out which aspects of the job they find most rewarding, and strive to make sure they get to do those things regularly in their work. Make sure they’re constantly learning, growing, and trying new things, which keeps their work challenging and engaging. Provide regular feedback. Be the kind of manager they can talk to so that when need be, you can implement changes. Additionally, when hiring, make sure the individual you choose will be happy in that particular position. Their skills, personality, and abilities need to align with the job.
2 – Lack of job training.
When employees don’t know their job or feel comfortable with it, they tend to do a poor job. That leads to poor job satisfaction on the part of the employee and the manager.
Solution: Train your new hires thoroughly. Evaluate the skills needed in all your employees and make sure they are proficient in them. Hire coaches. Find mentors. Employees have higher job satisfaction and loyalty when they are well trained.
3 – An organizational culture that expects long hours.
In the tourism industry especially, there’s a culture of “Presenteeism” where hotel managers are expected to always be there. In other companies, the boss is often a workaholic who sets the trend of working overtime on a daily basis.
Solution: Set clear and reasonable expectations for your employees. Let them know what’s required of them. Watch for those putting in too many hours and find out why it’s happening.
4 – Work/life conflicts.
Each employee has unique needs and demands on his or her time. What may be a normal workload for one might create a crushing conflict for another.
Solution: Be aware of each employee and their needs. Consider offering flex time or other options. Just letting an employee know that management is aware of their situation and is willing to make concessions is a valuable employee retention strategy.
5 – Burnout.
This is partly an emotional state of mind from too much pressure and too many demands.
Solution: Make sure your company is not cutting corners by deliberately understaffing, which creates resentment in your team. Also evaluate whether you are creating unrealistic expectations for your people. If your employees always feel behind and unable to keep up, they will leave.
6 – Lack of opportunities.
If employees feel they have no way to progress in their company, they’ll move on.
Solution: Show each employee potential paths for advancement. Help them to see this job as a stepping-stone within a broader career. Give them training and opportunities so they can step up. When you take an interest in their careers, you will retain your best talent.
7 – Favoritism and other ethical violations.
If employees think the company has different standards for different people, or doesn’t follow ethical principles, it creates cynicism, resentment, and high turnover.
Solution: Evaluate your company’s ethics. Do leaders display favoritism? Are you promoting fair standards in training meetings and encouraging people to violate them in practice? Create and follow an ethical, fair company standard to keep your employees happy.
By using the right employee retention strategies, you can make a profound difference in the lives and wellbeing of your employees. They will thank you by staying with you and helping your company succeed.
Motivating Top Performers to Stay: 21 Employee Retention Tactics
Zero in on these 21 key areas to motivate your top performers to stay and attract the best new talent for open positions. This list sprang from one compiled in Jack Phillip and Adele Connell’s book Managing Employee Retention: A Strategic Accountability Approach.
1. Social Responsibility.
People want to work at a company with a positive public image. Make sure your organization has a reputation for being socially conscious.
2. Market Performance.
Employees want to belong to a company with a solid future. Let them know about exciting new directions that company leadership is working toward.
3. Culture Fit.
If you need to bring new people on board, make sure your new hire is a good fit. When people understand and buy into the company culture and mission, they are more likely to stay.
4. Selection
New employees want the selection process to be fair and timely. Support your new hires with equitable and prompt selection practices.
5. Job Fit.
Work to ensure your job meets the expectations and skills of your employees. Strive to match people with tasks that fit their talents.
6. Orientation and Training.
Set up formal procedures to help employees adapt quickly to the job, the team, and the organization. Training and developing employees in jobs they like improves their productivity and cements their loyalty to your organization.
7. Job Satisfaction.
Make work engaging, challenging, rewarding, and productive. A dynamic atmosphere will keep employees feeling enthused about their work.
8. Workplace Design.
Employees want a pleasant place to work, so create attractive work areas that support job function, efficiency, and productivity. (If working virtually, use collaborative software that furthers this goal.)
9. Safety and Wellbeing.
Every employee wants to feel safe at work and to know that their employer cares about their wellbeing. Make sure your company has policies in place that support these aims.
10. Job Security.
Employees want to feel secure in their job. Show them a pathway into the future. Let them know there’s a succession plan in place, and that they can be part of it.
11. Culture
Create a supportive and encouraging culture that affirms people’s value and dignity, conveying respect in all directions.
12. Work/Life Balance.
Create family support and work/life balance programs. Don’t expect people to be connected after hours.
13. Diversity
Recognize and affirm the value of all individuals, prioritizing equitable practices and policies.
14. Pay
While it doesn’t all come down to pay, having a pay system that is fair, equitable, and competitive will help retain your people.
15. Benefits
Make sure you have an employee benefit program that can be tailored to your employees’ individual needs.
16. Rewards and Recognition.
Recognize and praise employees’ contributions in front of others. Consider an employee retention bonus for those who have contributed to the success of a major initiative, too.
17. Job Performance.
Make sure employees know the performance expectations that will lead to success, and mentor them every step of the way.
18. Quality Leadership.
More employees leave because of unsatisfactory leadership than for any other reason. They want leaders whom they respect and inspire. Formalize leadership development training and executive coaching as your primary talent management tools.
19. Empowerment
Successful organizations give employees a voice at the table whenever possible and help them take charge of their own career. Provide executive coaching for business leaders to build up their confidence and capabilities.
20. Teamwork
Create team-building programs so teams will use excellent communication and workflow practices. Then coach them to success.
21. Ethics and Trust.
Focus on building trust by being ethically responsible both within your company and in the broader community.
Which areas from this list do you need to focus on most? You may already be excelling in some of them while you need to grow in others. Use employee feedback and questionnaires to discover which ones are most important to your employees.
Now let’s delve into several specific areas that I see companies needing to really hone in on: Creating a unified identity and vision, modeling the qualities that matter most to employees, and nurturing employees’ growth rather than relying on gimmicks to show appreciation. Getting these three key areas right requires a great deal of effort and dedication, but it will play a vital role in retaining your top talent.
How to Design an Employee Retention Program that Works
I had an executive coaching session in which the CMO of a technology company stated, “My turnover rate is through the roof, and I know it’s costing the company money. What can I do to stop the bleeding? I can’t keep losing top talent right and left.”
He’s right—losing employees is an expensive proposition. Companies that deal successfully with this issue don’t just rely on an orientation meeting and an employee handbook. An effective program to retain employees involves the entire company and is ongoing. Successful onboarding is one part of the puzzle, but of course your program needs to cater to your existing employees as well. You also need to focus more on emotional takeaways than just a list of activities to check off. In particular, you need to help employees answer these three questions to forge a shared identity, purpose, and vision:
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Who are we?
Employees need to connect with their company through a belief in a shared purpose and vision. Help them understand the company’s overarching goals and the broader impact you aim to achieve. Convey your value proposition—what sets you apart from the competition, and why clients or customers love you. Share stories and anecdotes to drive your points home.
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Why am I here?
Help each employee understand how they fit into the overall picture. Make them feel like an important piece of the puzzle. Be clear about what you expect from both the department and the employee. This includes short- and long-term goals, major projects, deadlines, and deliverables.
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Where am I going?
Show new employees the path ahead, which includes how to navigate the corporate ladder, what kinds of training, coaching, and personal growth programs are available to them, and how they fit into the company’s future. Make them feel emotionally involved and committed, and they will be yours for years to come!
Modeling the Qualities That Matter Most: An Employee Retention Strategy That Works
Dianna found herself, somewhat unexpectedly, on the hot seat. As HR manager for a large manufacturing and distribution company, she was responsible for so much of the day-to-day operation that she had been ignoring some big-picture initiatives. Suddenly, the company’s employee retention strategy—or more correctly, its lack of one—had risen to the #1 spot on her CEO’s hot list. Dianna began researching best practices used in companies similar to hers and then called her direct reports together for a brainstorming session. She knew their turnover rate was way too high, so she and her team set the goal of reducing turnover by 30% in the next 12 months. The team agreed that their company’s wages and benefits were highly competitive, so they looked for other areas that needed attention. They identified and focused on developing three key cultural initiatives that they believed would help them retain their top talent.
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Tell the whole truth and nothing but.
Be transparent with employees, especially in uncertain times. Let them know what to expect down the road. If they feel that management is keeping secrets from them, they’ll think something is wrong—and they’ll jump ship at the first opportunity. Enlist their help to overcome organizational challenges, making them feel invested in the solutions.
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Hold managers accountable.
Assess whether managers are acting as the great coaches employees need. Your people need leaders who will mentor them to success. This means you’ll need to mentor your leaders themselves to success in this area, imparting the skills they need through executive coaching programs. Make sure they’re putting the skills they’ve learned into practice, evaluating employee engagement and satisfaction with the level of support they’re receiving.
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Put out the welcome mat.
When hiring new people, make them feel at home from day one. This means getting ready ahead of time so that there are no missing pieces, and designating specific people to answer questions and provide guidance. Make sure to give them meaningful work to start on right away, too. Within the first 90 days, the new employee needs to feel totally aligned with the company’s vision and mission, and totally committed to its success.
Using Authentic Recognition Rather Than Gimmicks – An Employee Retention Tactic
Sandy Asks: Our company culture is big on a lot of the rah-rah stuff. We have a softball team, monthly pizza parties, suggestion boxes in every department, and a costume contest on Halloween. It all looks like fun, but lately we’ve lost some of our best people and I’m feeling the need to create a more substantial employee retention program. As HR manager, I’m committed to hiring and keeping good employees. But there are so many kinds of retention programs out there that I don’t know where to start.
Coach Joel Answers: What you need to focus on is authentic recognition. When you create a workplace culture that fully engages and rewards employees at all levels, you win in three important ways: you build a loyal, committed workforce; you develop a great reputation among clients, customers, and the public; and you avoid the financial losses that high employee turnover creates. Here are three hallmarks of a good retention program.
Nurturing employees’ growth means more than a pizza party!
There’s nothing wrong with offering fun perks. Who doesn’t love a good pizza? But these are short-term, cosmetic ideas, and they don’t build employee loyalty that lasts. When you’re designing a program, you need to take several key steps. First, you need to align with your company’s strategic objectives. You need to consider what your competitors are doing and look at best practices in your industry. And most important, you need to include your employees in planning and implementing any new initiatives. People support what they help create.
For example, one of the best ways to retain good employees is to design a personal growth program that’s customized for each individual. Work with your managers to develop a checklist they can use that includes things like in-house and external training programs, executive coaching, job-sharing, and cross-training. Find out what type of training each employee wants and what their manager feels they need.
Establish a formal recognition program, but don’t stop there.
Linking pay to performance is an obvious first step, of course. And reward people for the company’s success as well as their own. You can do this in a number of ways. In addition to bonuses, I’d suggest things like extra time off, gift certificates for movies and dinners out, or a gym membership. Make sure to honor them in front of colleagues and possibly other leaders. And here’s a secret to making your recognition program even better—let the employees design it themselves, telling you what perks they’d most enjoy.
Most importantly, provide significant development opportunities. Most employees want to be challenged and want to feel that they are on track to move up in the organization. You could start by giving your best people an opportunity to train others, whether colleagures, subordinates, or new hires. Also provide a menu of training opportunities that might include anything from offsite seminars to tuition reimbursement and executive coaching. Give each employee an annual “growth allowance” and let them design their own personal development program.
When you implement the strategies suggested here, you will have taken a big step toward building a satisfied, committed workforce. And you’ll see the results in higher productivity and greater profits.
Foster a Healthy Work/Life Balance
Today’s employees are prioritizing work/life balance more than ever. In the wake of the pandemic, many began realizing that scrapping the daily commute gave them more time for family and their personal life.
You can foster work-life balance by first making work a fun place to be. If employees dread Mondays and rejoice on Fridays, they are not having a good time at work. Establish or celebrate company traditions such as a family-invited summer picnic. Put together teams of employees to volunteer for community events such as American Cancer Society’s Walk for the Cure or Relay for Life. Implement flexible working hours. (Yes, your daughter’s dance recital is a major event!)
Whether the economy is soaring or tanking, employees want to utilize their talents—and they want to grow. They will be most satisfied with and committed to your company if you have an employee retention plan that makes them believe you are equally committed to their success. Implement the employee retention strategies discussed here in the short-term to entice your employees to stick around for the long-term.
Joel would love to discuss specific employee retention programs that can work for you and your employees. Corporate management needs to view employee retention strategies as an investment that pays dividends, not an expense to be avoided. Time and money spent now will add strength to the talent pool and dollars to the bottom line. Contact Joel today to get the ball rolling.
