The unemployment rate in the United States is at a record low. This is great news for employees of companies, but not such good news for employers trying to maintain a steady workforce. Research shows that every month approximately three million Americans quit their jobs in search of something better and 31% quit before even making it to the half-year mark.
These statistics are impactful to employers since the cost of losing and replacing an employee is typically 1.5 to 2 times the employer’s annual salary. There are also the intangible costs of losing employees, such as lowered productivity, lower morale for remaining employees, and increased competition when a valuable employee leaves to work for a competitor. While it is unrealistic to assume every lost employee could have been retained, there are several key actions that will help to retain valuable employees. To keep employees from leaving to go work for a competitor an organization should consider the following employee retention strategies:
Find out why people are leaving and focus on those areas. In order to retain employees it is important to understand why employees are leaving in the first place. This can be done by completing thorough and consistent exit interviews with employees who are leaving the company. Engagement surveys can also be conducted to proactively measure employee satisfaction. Patterns can be detected when examining the data from these tools. Some questions you may want to ask:
– Are employees leaving because they feel they are not being treated fairly?
– Is your company being priced out by a competitor?
– What is the percentage of low performers leaving versus high performers?
– Are there common reasons for leaving?
– Are there common areas where employees are communicating dissatisfaction in the workplace?
Responses to these questions and others like them provide critical data to employers on areas they need to focus their attention on to keep valuable employees from leaving.
Ensure salary and benefits are competitive. In order to retain quality employees, compensation and benefit plans need to be fair, as well as competitive. It is good practice for organizations to complete annual compensation analyses for each position in the organization and to use the information to make sure they are comparable to other businesses in the organization’s regional area.
Hire the right person for the position. Many employees leave companies because they realize they are not a good fit for the position they accepted or for the culture of the organization. It is important for organizations to do due diligence in the hiring process to ensure that the job candidate’s skills and abilities are a good match for the job. It is also important that hiring managers are transparent with job candidates, being completely honest with them on what to expect upon hire to avoid any surprises once on the job.
Make new employees feel welcome immediately upon hire. Since many of the employees who leave an organization leave within the first six (6) months it is important to begin from day one making new employees feel welcome and part of the organization’s team. Some creative ideas for accomplishing this are to have a team breakfast or lunch to welcome the new employee or providing the employee with a personal welcome letter from the founder/president of the company. The sooner the employee can feel a connection with others in the organization, the more positive the impact on retention.
Monitor manager performance closely. One common reason why employees leave organizations is conflict or negative relationships with particular managers in the organization. One negative manager’s actions can cause numerous employees to leave if their behavior and/or attitudes are not changed to a more positive one. Leaders of an organization need to keep an eye on all managers to ensure they are managing in a positive and productive manner. Training should be provided to all managers on how to motivate and encourage different types of people, resolve conflicts, and manage stress effectively. Managers who consistently receive bad reviews from employees after multiple warnings should be removed from managerial roles.
Increase employee engagement. Employees tend to feel more valued and engaged when they can see how what they do on a day-to-day basis is linked to the goals of the organization. When they cannot see their impact on the business it negatively affects their productivity and feeling that their work is meaningful in helping the organization reach its goals. The goals, values, and mission of the organization should be communicated to all employees beginning on their first day and consistent communication should be provided as to how these will be accomplished and each employee’s role in that process. Other ways to increase employee engagement include providing learning opportunities such as mentorship programs, cross-training opportunities and making sure jobs remain challenging.
Examine the reputation and brand of the company. Employees are more likely to stay at an organization when it is somewhere where they feel proud to work. Leaders of organizations should take steps to ensure that the general image of their company is a positive one. Some ways this can be done include:
Involvement and support of the community, as well as charitable organizations; making sure the organization is operating in an ethical manner; and taking initiative to ensure business practices support the environment, equality, diversity, and education.
Effectively managing and improving retention in an organization isn’t easy. It takes time and effort for leaders to analyze the causes of turnover in their organization and to implement strategies that improve their retention rate. However, given the increasing difficulties in keeping valued employees and the cost for each one that is lost, the steps listed above are well worth the effort.