Voluntary employee turnover was up an additional 2 million over 2018, bringing the total to over 42 million in 2019, according to Work Institute’s 2020 Retention Report.
In the current economy and job market, implementing effective employee retention strategies is pivotal to a company’s success. Turnover causes employers major operational costs and inhibits growth and profit.
Of course, we don’t want to focus only on the negative! Instead, we’re going to give you some insight into:
- Why employees leave (i.e., what to avoid)
- Why you should focus on employee retention strategies
- 6 retention strategies you can implement today
Why Employees Leave
According to the Retention Report, the top three reasons people left their jobs in 2019 were:
- Career development (20%)
- Work-life balance (12%)
- Manager behavior (12%)
Overall, 78% of the reasons employees quit could have been prevented by the employer. An organization’s leadership has a great deal of control and influence on its employees’ morale and satisfaction!
Today’s workforce is driven to grow and advance in their careers. They value work-life balance and things like flexible schedules. And they do not tolerate poor management such as unprofessional behavior and lack of competence.
These are all areas that employers can work on through improved policies, processes, and management training.
Why You Should Focus on Employee Retention Strategies
Focusing on employee retention is much more cost-effective than dealing with high turnover rates.
The Retention Report found that the costs of voluntary employee turnover in 2019 exceeded $630 billion. Turnover cost is based on four factors:
- Cost of termination
- Cost of replacement
- Vacancy cost: Number of days job is open times the average value of the job per day
- Learning curve (productivity) loss: Revenue per employee per day times number of days it takes to get the new hire up to standard performance
Work Institute states:
The median income for a salaried employee in the U.S. translates to a yearly income of approximately $48,672. Work Institute recommends (conservatively) costing turnover at 30%, approximately $15,000 per employee departure.
Not to mention, there were over 7 million job openings in 2019, but only about 6 million unemployed people. Employers need to do more to retain talented staff and make them feel valued. If you don’t, your workers will look elsewhere—and sometimes, the grass really is greener on the other side.
6 Employee Retention Strategies to Use Today
So, how can you reduce employee turnover? When you put in the time and effort with your current employees, your business can retain awesome talent and avoid those scary costs and hassles mentioned above!
1. Hire the Right People
Employers and hiring managers should truly follow their gut when it comes to hiring choices. You may have someone who is a star on paper and checks all the boxes when it comes to skills and qualifications, but they also need to be a fit for the culture.
In order for them to be a happy, productive member of the team, a new hire has to get along with his or her coworkers. Ensure candidates are the right fit by asking them behavioral questions during the interview to learn how they handle certain situations. Introduce them to other employees, particularly those they would be working with directly.
If someone does not fit in with the other personalities and overall company culture, they’ll feel lonely and disconnected from the rest of your organization. This plays a large role in ensuring they stay for years to come.
2. Set Expectations Early
We cannot stress this enough: Retention starts during the hiring process!
The first step is to clearly outline the job responsibilities and salary expectations in the job description. This will ensure candidates know exactly what you’re looking for and if they are a good fit for the job. You’ll avoid confusion, disappointment, or frustration. With clear expectations, employees will be productive from the get-go and confident in their skills and abilities to do the job well.
Next, create a positive onboarding process that is a two-way experience. Share your business’s story, goals, and accomplishments, but also be sure to let the new employee know how they will contribute to the company and help it grow. Discuss their background and experiences, and how those things can fit in with their new position and the company’s mission. This will immediately give them a sense of belonging and show them that their job matters.
Something you should NOT do is overload new team members with detailed policy and benefits information. Orientation should be used to give overviews of policies.
Finally, be ready for new employees on their first day. Set up their workspace and supplies so everything is ready when they arrive. Have a plan in mind for training new workers and getting them up to speed on current projects. Some employees may prefer to dive right in and take an autonomous approach, while others may prefer more guidance as they get started. Managers should be flexible and prepared to support new employees based on their needs and learning styles.
3. Define Career Paths
Most employees want to grow and advance their careers; if they become stagnant, they will become unsatisfied and search for other opportunities.
Showing employees how they can grow with the company can help them envision staying with the organization long-term. This keeps employees motivated and helps reduce turnover rates.
A defined career path includes established goals or changes in title or salary. Employees might move upward or earn more responsibilities in their current position. Coach them based on their strengths and goals. Recommend ways to advance within the organization. Provide training and professional development opportunities, then allow employees to put their new skills to work.
4. Practice Consistent & Frequent Communication
Effective managers know that constant communication is key. Use regular check-in meetings to ensure employees are happy with their work and the company as a whole. Maintaining an open dialogue is also how you can learn of any problems, concerns, or other areas where employees may need support.
Maintain a performance review schedule so that employees can both receive and give feedback. Performance assessments are also crucial times to discuss the worker’s future with the company and dive deeper into their goals.
Focus on areas of strength, rather than only on areas of improvement. Consider how you can develop an employee’s existing talents and how much more motivating this would be for them. After all, those strengths are the reason you hired them!
Finally, remember to give praise and recognition to employees when they do a great job on a big project or exceed their sales goals. Show them that you see and appreciate their hard work. Employees who feel respected and appreciated are much more likely to stay. This FREE employee retention strategy is perhaps the simplest, but one that is often overlooked.
5. Demonstrate Trust & Confidence
Are you seeing a dip in morale? Entrusting an employee with a major client, important project, or company-wide event shows your confidence in them. Demonstrating this level of trust and belief in an employee will help them see that they are valued and appreciated.
Incentives, like monthly or quarterly sales drives for salespeople, are another great way to keep employees motivated and excited to do their jobs well. Get creative with programs and events to encourage workers.
6. Offer Competitive Pay & Employee Perks
Believe it or not, workers can find another business that will pay them more for the same job.
Keep up with market wages for each position in your company. Do your research and find out what your competitors are paying their employees. Remember to base salary on your local area.
If the company is growing, and your employees’ responsibilities grow with it, make sure they are fairly compensated. An employee who continues to take on more and more work without appropriate compensation will only last so long.
A recent survey by Fractl found that people will consider lower-paying jobs with better benefits. Benefits like affordable health, dental, and vision insurance are most valued; however, respondents also indicated a strong desire for more flexibility and vacation time.
Keep employees happy and help them maintain a work-life balance by incorporating policies like:
- Flexible work schedules
- Unlimited PTO
- Remote/Work from home options
- Four-day workweeks
- Paid paternity leave
Perks like those above can help employees avoid burnout by allowing them to take guilt-free time off and work under schedules and conditions that fit their lifestyles.
Improve Employee Retention
There are always going to be employees who leave your business for one reason or another. Employers can do their best to retain high-quality employees by treating them well and creating a positive work environment.
It is also important for employers to keep a finger on the pulse of why workers choose their organization, why they stay, and why they leave. This knowledge will empower you to improve employee retention.
For more help and guidance on how to reduce employee turnover, contact BlueLion’s human resources experts today at 603-818-4131 or info@bluelionllc.com. We’re happy to help you keep your team happy!
The information on this website, including its newsletters, is not, nor is it intended to be legal advice. You should contact an attorney or HR specialist for advice on your individual situation.
