7 Great Employee Retention Strategies
Unemployment is at record low levels. Great news for employees, but rough water for employers trying to hang onto a steady workforce. Every month, about 3 million Americans quit their job in search of something better. 31% of employees quit before making it to the half-year mark!
This kind of turnover is extremely expensive. By some estimates, it can cost an employer double an employee’s salary to replace them when they quit. That cost varies across different industries, but for some employers, it can be even higher.
Consider the employees you have working for you who have mission-critical skills that your business relies on, employees who have reinvented their job or who are such a linchpin that the thought of them leaving terrifies you. 25% of all employees are of this nature, what you might consider “high risk” when it comes to retention.
How do you win the employee retention battle? How do you keep from losing your employees in this kind of job market? To keep your employees working for you, consider trying these seven employee retention strategies:
1. Salary And Benefits Must Be Competitive
A recent Glassdoor survey of people in recruitment, HR, and hiring managers found that for 45% of employees who quit, the top reason is salary. This reason was followed by career advancement opportunities, better benefits, and location.
Is it always about the money?
According to a collection of recent surveys on employee retention, only 24% of “Generation X” employees say that financial stability motivates them to stay in a job. Yet 56% of employees say that health care and insurance concerns keeps them in their job. Benefits that are actually beneficial matter. Money matters. What you offer your employees in this area must be comparable to other businesses in your industry in your region.
After seeing those statistics, you’d be forgiven if you thought that the easiest fix for employee retention concerns would seem to be to offer more money and more benefits. No doubt these are two top issues that employers must consider, and for some employees, that would be necessary.
However, seeing this as the only option is a knee-jerk reaction that can cost your business more than it can afford. Salary and benefits are important and should be considered—especially if you are paying below industry standards—but there are other methods to retain employees than costly raises and benefits.
2. Hire The Right Person At The Start
Glassdoor found that 35% of those doing the hiring of new employees are doing so with the expectation that more employees will be quitting in the coming year. It’s a little disheartening to know that those doing the hiring are already envisioning over one-third of their hires walking out the door.
If you hire a quitter, don’t be surprised if they quit. If you hire someone who’s a bad fit for your business, don’t be surprised if they (or employees they’ve annoyed) quit.
37% of hiring managers say that new hires would stick around longer if they were better informed during the hiring process. A poor onboarding experience for a new hire builds a foundation of negativity in the new job.
Make sure you’re being honest about what you expect of the new hire. Don’t hide or sugar-coat aspects of the job just to get a person to bite. Transparency is key in finding the right employees.
3. Reduce Employee Pain
You can’t expect employees to function like robots. When an employee’s work and life balance is out of whack, there’s pain. If your employee feels like she spends most of her life working instead of living, the job becomes the bad guy.
Consider the aviation industry, and the struggle airlines are having with a pilot shortage. There simply aren’t enough pilots to fill the airplanes, and a looming retirement wave of seasoned pilots promises to make the problem worse.
Airlines have been working at several solutions, with one being fairly obvious: offer better salaries than can be found elsewhere in the industry, and tempt pilots away from other airlines or from corporate aviation. This, in turn leads the Air Force to increase salaries for pilots, a kind of trickle down effect that will ultimately have the worst impact on those companies unable to compete with such salaries.
What should a small business or company do if they are in a situation or an industry in which competition for great employees is high, but the business can’t afford to pay a dollar-for-dollar competitive salary?
Find the pain point.
Through employee surveys, direct feedback, or paying attention to industry trends, find out what is a point of frustration for employees in your industry.
For example, commercial pilots often have onerous schedules, living in one city and having to fly to another city where they are “based.” They spend time surrounded by traveling strangers (some who are not the most cheery) and in hotels instead of with family. That’s a point of pain for some.
Alleviate the pain point.
Think of pain as the main thing to be alleviated.
Money alleviates pain, in a way, making the hassle worthwhile because the resulting paycheck will make other areas of life less painful. But there are other ways to attack the pain problem that some employees will consider being just as valuable as being paid more.
Using our aviation example, corporate aviation can sometimes offer more family-friendly schedules even if they can’t match commercial salaries. They are revamping how they set up flight schedules so that pilots can be home each night, or have shorter on-the-road schedules.
Conversely, airlines are attractive to corporate pilots who are tired of the full service (clean, schedule, greet, stow luggage, plan) they have to handle on each flight; for most airlines, the pilot simply has to show up to fly. Perhaps a corporate flight department might consider hiring staff that would do much of the unskilled labor (cleaning, etc.) and fully combat all perceived pain points to retain and attract pilots.
Don’t let the pain build elsewhere.
Good workers are easily taken for granted. Be on guard for employees who may not be complaining, but are quietly feeling exhausted or frustrated about the amount of work expected from them.
Some employees, because of their personality or nature, won’t even realize they are overworking themselves. Perhaps you don’t expect it of them, but they have a work ethic that demands a constant nose to the grindstone approach. These are employees who sometimes think in terms of an accounting ledger, and will rarely take time off because they don’t want to miss the income. For these people, paid vacation helps. Gifting a random paid day off helps.
Perhaps organizational changes have created pain unintentionally. Perhaps you’ve created a pain point by solving another problem but creating a new one. Whatever the case, communicate with your staff and keep an eye out for areas that have inspired grumbling. Those are pain points.
Want to save this ebook to refer to later? Download your free copy of the First Time Managers Handbook now!
4. Have Leaders, Not Bosses
Few people want to be leaders, but everyone wants to be the boss. Remember, though, that people follow leaders, while they abandon bosses. A boss is a dime a dozen while leaders are rare.
Do you want to keep your employees?
- Clear direction towards the future. Good leaders let employees know where the company is headed. Bosses don’t share information and leave employees wondering if there’s good or bad coming down the pipe and if they should be concerned.
- Able to handle challenges. Leaders handle the many challenges that come their way instead of intentionally or unintentionally offloading the stress onto the employees.
- Genuine desire to offer high quality. For both customers and employees, good leaders offer the best products, services, and experience possible. Bosses are almost behind the curve, scrambling to meet the minimums.
- A belief in the importance of people. Good leaders consider employees their most important asset. Bosses are focused on numbers.
- Inspires confidence. Good leaders make employees feel confident about their ability to lead them to a good place. Bosses tend to inspire passive-aggressive frustration as employees question the decisions that have been made that have affected them negatively.
How do you be a good leader instead of just a boss?
Be available for your employees.
Bosses often give lip service to an “open door policy”, but it’s not enough to simply invite criticism and feedback. It’s not unusual for people to feel they can’t really express themselves for fear of embarrassment or reprisal, even with open door policies in place.
This is about actively creating an open rapport with employees. You don’t have to become best friends but taking the time to be friendly and engaged with your employees will pay off in spades.
Be steady and structured.
Anything less is chaotic. Employees don’t stick around for chaos and drama.
5. Keep An Eye On Your Managers
Ever ask people about the jobs they hate and the reasons they left?
Chances are pretty good that one of the first things you’ll hear is griping about a manager or boss, not the products, the customers, or other co-workers. Keep an eye on your managers.
People follow as they’re led, and a bad manager creates a negative mess all around.
So, while you’re taking the time to train your manager to deal with the technical aspects of their positions, it’s in your best interest to include some “soft skills” as well. This means teaching your managers how to encourage and motivate different types of people, personality traits, conflict management, stress management, crisis management, and so on.
6. Make Employee Engagement Possible
According to a Gallup poll, 56% of somewhat disengaged and 73% of actively disengaged employees are actively looking for a different job.
That ought to get any employer’s attention.
Your first response, however, shouldn’t be a matter of blaming employees for their distraction as a reason for their disengagement. Distraction is associated with motivation problems. As an employer, you need to understand what motivates people to want to become fully engaged with the work they do and what makes them merely punch in at the time clock until something better comes along.
What motivates people to engage, care, and want to stick around and stay a part of the team?
Offer valuable learning opportunities.
Employees who are highly engaged in learning are also more engaged at work.
Just remember that the kind of learning opportunities I’m talking about isn’t the same as on-the-job training. You should be helping your employees to grow and expand, not simply get better at what they already do. If your training centers completely rely on increasing performance in a current role, you’re missing the boat. Consider:
- Cross-training programs so employees have a broad skill set, not just a narrow set limited to their specific job.
- Mentorship programs that encourage mentee to become mentor.
- Create a leadership ladder so employees know what they need to do to move up.
Good employees (the ones who are dedicated to your company—the ones you really want to keep) want the opportunity to advance, not just maintain momentum.
Make advancement possible.
Whether it’s job advancement, promotion, or some form of professional development, people who feel like there is always a goal they can work for instead of a dead end are generally more motivated.
Makes sense, doesn’t it?
How hard will you work if you know you’re only going to be treading water, instead of advancing, for the foreseeable future of your job? Why wouldn’t you start looking for a new job if you’re someone who is motivated by achievement?
Give employees opportunities for concrete success.
According to Entrepreneur, people have a “deep desire to feel they’re succeeding and that their talents and capabilities are being used in a way that makes a difference to the business.”
It’s not enough for you to give vague (if well-intentioned) feedback. Your employees actually want to see the results of their work. They want to have that concrete object that they can rest their pride on. They need to see the results with their own two eyes.
7. Be A Brand They Can Be Proud Of
This is an age of activism, with upcoming generations who want every aspect of their lives to be part of a solution instead of a problem. Be a business known for the positives, known for your involvement and support of:
- Charities and helpful organizations.
- The local community.
- Issues such as environment, education, or equality.
- Team-building and a family-like work environment.
Find a way that your business can fit such a reputation. You might have to turn your business reputation on its head. For example, maybe you are an auto shop that donates to environmental activities, or is known for your eco-friendly policies regarding your waste. Perhaps you run a restaurant that regularly provides food for a local soup kitchen.
Employees who are passionate and care about the impact their lives have on the world will consider working for a positive branded business a serious benefit.
While every business has to evaluate where their wages and benefits sit in comparison to regional industry standards, those direct dollar concerns aren’t the only way to retain your employees.
Just remember that your employees aren’t automatons, chugging along only for a paycheck. They care about where they work, how they work, and who they work with. When competing in a tight job market, it’s important to keep that in mind instead of getting in an unwinnable wage bidding war that could wipe out your bottom line.