5 Proven Strategies for Improving Employee Retention
Improving employee retention doesn’t happen overnight. In fact, most organizations don’t determine the leading cause behind their retention issues until a valued employee decides to leave, and an issue is identified during the team members’ exit interview.
Employee retention is one of the biggest challenges facing any modern organization. In fact, Josh Bersin found that employee turnover costs the average business anywhere from 1 to 2.5 times the employee’s salary.
Not to mention the “soft costs” associated with low employee retention, including decreased employee engagement, additional training costs, lowered productivity, cultural impacts, and more.
With these factors in mind I often find myself wondering: why aren’t CEOs and other C-Suite leaders identifying and improving employee retention issues before employee turnover becomes a challenge?
If your organization has struggled with low employee retention, I invite you to apply these six strategies our clients have used to increase employee engagement and decrease employee turnover:
1. Improving Employee Retention Starts with Recruiting
One of the critical factors associated with low employee turnover is hiring candidates who are the right fit for your organization. By focusing on job fit and cultural fit over specific qualifications, you can increase the likelihood that your new team member will work synergistically with other staff, and will contribute to your organization in a positive way.
Other factors to consider when recruiting a new hire include:
- Longevity. Look for candidates who have worked in their previous role for at least a few years. This not only demonstrates their ability to perform in their role, but also indicates that they were actively engaged within the company and dedicated to helping it succeed.
- Extracurriculars. Individuals who play team sports, sit on committees or boards, or who volunteer regularly have demonstrated engagement and investment in causes that aren’t solely self-serving.
2. Develop Education and Succession Plans
Promoting from within helps reduce the amount of time spent sourcing, interviewing, and onboarding new recruits to your organization. It also works to enhance the employee experience by providing clear paths to success and demonstrating to team members that they are contributing to the company’s ongoing success.
However, employee education and succession planning should never be an afterthought. By making individualized development and training plans available to every team member you can encourage self-directed learning and development necessary for employees to feel empowered and invested in your organization.
3. Offer Enviable Benefits
“Employee benefits” means so much more in the modern workplace than just healthcare or paid sick leave. While paid sick leave is generally considered a “must have” by today’s standards, leaders must think creatively in order to attract and retain the best and brightest from the upcoming generation of workers.
Deloitte has predicted that Millennials will make up 75% of the global workforce as early as 2025, which means forward-thinking leaders need to be investing in workplace benefits such as:
- Flexible or telecommuting options. 35% of Millennials say they value schedule flexibility over pay, so consider offering more flexible options as an alternative.
- Generous health benefits. Employees who feel confident that their workplace is invested in them will reinvest their energy into the business.
- Invest in paid maternity and paternity leave. While unpaid maternity leave is mandatory in the United States, unpaid leave puts undue strain on new families. Consider investing in parental leave for your team members as a way of demonstrating your organization’s investment in their staff.
4. Strive for Openness and Transparency
Open, ongoing communication creates a shared sense of purpose and community within an organization. I recommend investing the time to meet regularly with team members and departments heads to discuss challenges and opportunities. I also recommend encouraging an “open door” policy where staff can speak frankly without fear of repercussions from management.
If you’re like other busy CEOs that East Tenth Group has worked with in the past, then regular meetings may not be feasible for your schedule. If this is the case I recommend scheduling in at least one hour per week where your office door is “open” and team members can walk in and discuss any challenges they may be experiencing with you.
5. Use HR Data to Make Decisions
Technology is disrupting multiple aspects of the modern workplace experience, and one area where HR can step up and start improving employee retention is by investing the right HR tools.
Not only can the latest HR tools save time by automating processes, streamlining feedback, and increasing alignment and communication between teams, but reviewing data can identify retention trends and challenges including:
- Recurring periods of high employee turnover. Identifying when you’re losing staff can help you locate the issues leading up to these periods of employee loss.
- Correlations between commute time and turnover rate. Are your staff who commute the farthest leaving the fastest? Research has shown that commute time contributed to more ‘voluntary turnover’ than experience and tenure.
Be Prepared When Turnover Occurs
As much as we may wish that it wasn’t the case, employee turnover is inevitable.
I, like many of our clients know the sting of losing a “rockstar employee” and encourage you to take this change in stride. I also encourage you to Take.Action.Now and to use the exit interview as an opportunity to thoroughly review as many of the elements that led to the team member’s decision to leave as possible. By being proactive in this situation you can work to increase employee retention over time.
By addressing the specific items that contributed to an employee’s decision to leave your organization you can use this as an opportunity to focus on improving the employee experience moving forward.
The best leaders are those who take the time to regularly self-assess and identify the challenges keeping them from true leadership. Are you ready to take the next step?