Employee retention is a critical aspect of any successful organization. High employee turnover can be costly regarding financial resources and the loss of valuable talent and institutional knowledge. In today's competitive job market, creating a work environment that attracts and retains top talent is more critical than ever.
After you’ve finished the recruitment process and you’ve hired your employees, keeping them happy on the team is essential. In addition to the cost benefits of employment continuity, there are also morale and productivity benefits.
What Is Employee Retention?
Employee retention refers to an organization's ability to retain its employees for a significant period of time – its aptness to keep employees engaged, motivated, and committed to their goals, mission, and vision.
Just because you hire a new employee doesn’t mean the recruitment process is over; rather, it's time to switch your focus to retention. Retention is a holistic approach involving a comprehensive plan to create a positive work environment that not only attracts top talent but encourages them to stay.
Why Is Employee Retention Important?
Employee retention is crucial because it impacts every organization's bottom line, productivity, and overall success. Thus, it is not something you should overlook. Here are just a few of the many reasons why you need to take the time to retain your workforce:
High employee turnover can be costly for organizations.
The cost of hiring and training new employees can be substantial, in fact, the average cost of employee turnover is 33% of the worker’s annual salary. Plus, the loss of valuable talent and institutional knowledge can negatively impact your business’ productivity and performance. Retaining employees can help reduce these costs and ensure you maintain a stable and experienced workforce.
Improves employee productivity and performance.
Employees who feel valued and engaged are more likely to be motivated and committed to the organization's goals, mission, and vision. This can lead to increased productivity, improved quality of work, and better customer service.
Helps to build a positive organizational culture.
Employees who are rewarded and recognized for their hard work are more likely to have a positive attitude toward their work and their colleagues, fostering a more collaborative and supportive work environment.
Improves the organization's reputation.
Word of mouth continues to be one of the most authentic and influential forms of recruiting and referrals. Happy and engaged employees are more likely to speak positively about the organization to others, including potential customers and job candidates. This can attract top talent and improve your brand’s image.
Support the organization's long-term success.
Long-time employees develop a deep understanding of your culture, values, and operations. Their commitment to your business is valuable as it can lead to increased innovation, improved decision-making, and better problem-solving from your team.
How Do You Retain Top Talent?
In today's fast-paced job market, retaining top talent is crucial for any organization looking to maintain a competitive edge, and there are several strategies that can be implemented to achieve this goal. We’ve compiled a list of effective tactics worth considering to keep your employees happy and your team strong.
Train your managers.
The majority of the time, employees do not leave organizations—they leave managers. You may have excellent managers that can perform many functions of the job, but if they don’t know how to manage, motivate, and treat employees fairly and effectively, you will face employee dissatisfaction and turnover.
Offer extrinsic and intrinsic rewards.
Ensure you are offering an equitable salary and bonuses within your geographic area and industry. Additionally, benefits such as health insurance, retirement plans, and other perks, including flexible work arrangements and paid time off (PTO), should be equitable (extrinsic rewards).
Employees don’t stay just for the pay. They also need to know that their work makes a positive difference to the goals of the company, their managers, customers, and fellow employees (intrinsic rewards).
Consider company culture during the hiring process.
A positive work environment is essential for employee retention. This should include promoting a culture of respect, open communication, and teamwork, as well as providing a safe and comfortable physical environment.
While a candidate may possess all the skills necessary to perform the job, if they are not a good fit with your company culture and fellow employees, they are not a good fit for the company. Hiring them anyway will result in increased turnover.
Promote from within.
When employees have the opportunity to create a career path within their company, they are motivated to stay. Employees want to feel that they are growing and developing in their careers. If you pass over suitable, qualified employees for promotions or even desired lateral moves, they will leave and go to a company that recognizes and rewards their efforts.
Give frequent feedback.
Don’t wait until review time to give feedback. Your employees want to know how they are doing and how they can improve their performance. Give clear examples and specific tactics they can use to improve their performance. Set goals together. Engage your employees by asking how they can resolve performance issues. Don't forget to give positive feedback to those doing a good job. Nobody wants to hear about their performance from their manager strictly when it’s negative.
Listen to employee feedback.
It's essential to listen to employee feedback and take action to address their concerns. Conducting employee satisfaction surveys, holding focus groups, and providing opportunities for open communication can help identify improvement areas and demonstrate that the organization values employee input. After all, they are performing the job every day and can give you the best feedback and offer great suggestions for improvements or changes.
Encourage executive conversations.
Employees want to hear from executive-level management about what’s happening in the company—the good and the bad. Did you have a really good year? Let your employees know and thank them for their part in that success. Take time to share your goals for your company's future with your employees and help them understand their role in meeting these goals. If your organization has significant changes, your employees need to hear that from you because adaptations can often cause fear and stress. You need to address these changes and alleviate your employees’ concerns.
Recognize employee successes.
Employees want to feel valued and appreciated. Recognizing and rewarding employees for their hard work and contributions can go a long way toward building loyalty and retaining top talent.
Recognition does not have to be complicated. Let your employees know if they are consistently doing a great job or excelling on a particular project. Send an e-mail, write a letter. Even a high five and "great job!" from you can mean a lot. Be specific when you express your recognition. This can be incredibly influential when it comes from top management.
Offer autonomy.
Employees want direction from their manager but also value a certain degree of autonomy in their jobs. Employees need a clear job description, and their manager must clearly express what their expectations are from an employee for their overall performance and day-to-day responsibilities. With this clarity, employees can direct their workflow and performance without being micromanaged. Employees can take ownership of their roles and responsibility for their performance.
Facilitate teamwork.
People spend most of their time at work and with their fellow employees. It's crucial to build strong, functional, well-led teams. Successful teams communicate, are respectful of other team members, and are focused and committed to their organization and to achieving goals. Good teamwork facilitates positive relationships with coworkers. It helps bond them together as they work to achieve common goals—an important factor in retaining employees.
Offer work-life balance.
Work-life balance is becoming increasingly important to employees, particularly younger generations. Offering flexible work arrangements, such as telecommuting and flexible schedules, can help to attract and retain employees who value work-life balance.
Investing In Your Employees
Your employees are the backbone of your company. When your employees are happy, it shows in their performance—and it will be one the most important factors in retaining your customers and increasing the overall profitability of your organization. Investing in employee retention strategies can create a workplace in which employees want to stay, leading to increased innovation, growth, and success.
Trust GMS as your HR partner for the complete employee lifecycle – from hire to retirement. By outsourcing your recruiting efforts to us, our highly trained recruiters will deliver the candidates you deserve, especially for those hard-to-fill positions. Once you’ve found the perfect match and an offer has been accepted, our paperless onboarding, benefits enrollment, and learning management system will help your new hire get acclimated to your organization and their new career.
As their career continues and they grow with your company, we’ll be there to assist with employee management and development – from handbooks to employee surveys and even performance management.
Make no mistake, investing in your employees is not a one-and-done ordeal; it’s an ongoing effort that has a direct correlation with your attrition. We’re here for you every step of the way – contact us today to learn more about what we can do for you and your business.