Employee Retention: Your Company’s Best Friend – Did you know that the cost to replace a highly trained employee could exceed 200 percent of their annual salary?
Employee turnover is expensive, no matter what type of position an employee holds, so as a business owner and company leader, it’s important that you understand the true value of not only hiring top talent but retaining talent, in today’s competitive workforce.
Most business owners have said “bye, bye” to employee loyalty that existed in past generations, and have said “hello” to the cruel acceptance of employee turnover and constant hiring associated with today’s talent…but that doesn’t have to be your mentality, nor should you settle for that common misconception as your workplace cultural norm.
The first step toward achieving better retention is understanding the scope and the core issues that drive turnover. The most common causes of employee turnover are reported as no room for growth within the company, the pay isn’t great, an unfavorable work environment, inadequate supervision or training, and the feeling of being under appreciated by leadership…so how do you overcome these common workplace challenges to not only recruit top talent, but retain your company’s top talent?
Close the Generation Gap
Millennials can have a negative rep in the business world and many business owners may stray away from hiring Millennials, but it can be a costly mistake. When hiring, it is important to not compare Baby Boomers to Millennials and implement a company structure that merges the two generations cohesively to bring out each of their strengths and similarities for a profitable, productive, and happy company.
One way to merge the generational gap and retain both tenured and new talent is to offer value added services that make your employee’s lives easier or less stressful. Recent research from Glassdoor conducted across age groups found that more than 57% of people said benefits and perks are among their top considerations before accepting a job, and four out of five workers said they would prefer new benefits over a pay raise. By adding value-added perks for employees, such as weekly dry cleaning services, free gym memberships, catered lunches, childcare, and group outings, you are increasing employee loyalty, satisfaction, and positive office culture- without negatively impacting your bottom line.
Another modern employee retention strategy is providing incentive programs and employee appreciation systems in addition to traditional compensation packages. Nearly half of employees want to receive rewards spontaneously (47 percent), while four in 10 (38 percent) want to receive rewards in exchange for good work (Xexec). Implementing these programs helps to close the generation gap and meet the modern expectations of your employees.
Restructure the “9 to 5”
A decade ago, working from home may have seemed like a distant dream. Today, it’s the future of work. With millennials the driving force behind this shift in the workforce, remote work was dismissed as another “annoying” millennial trait. As more companies adopt telecommuting practices, the benefits are very clear. No longer is remote work about working on a beach, it’s a complete redesign in how we approach the way we work.
It is estimated that employers in the US lose $1.8 trillion a year in productivity. From distractions like water cooler gossip to excessive commuting, and stress, workers are finding it harder than ever to hit maximum productivity in a traditional office work environment. There is always the concern that when employees leave early for the day or aren’t in the office from “9-5,” work is not being completed or that it is not of quality, but studies show that flexible scheduling and working remotely actually improves employee output. Are your employees praised for “taking one for the team” by working late? That’s a dangerous precedent to set. If you don’t afford your employees enough time to pursue their passions and recharge, they’ll eventually burn out. And when they do, they’ll leave.
According to the State of Work Productivity Report, more than two-thirds of managers report an increase in overall productivity from employees who work remotely and are granted flexible office hours.
To help restructure the “9 to 5” mentality, ask yourself, “Is this employee getting their work done?” and “Is this employee meeting or even exceeding my expectations?” This will modernize your organization’s KPI (key performance indicator), including employee productivity and output quality for a successful remote-work company structure. The result? Employee retention. Gallup Polls have shown that employers who offer the option to work remotely have 25% less employee turnover, and more than 80% of employees consider telecommuting a job perk. It’s time to rethink how you think about time…it’s a win-win for your company.
Don’t Be A Bad Boss
Bad management and poor leadership is one of the most common causes for employee turnover, so it is important to implement transparent policies and guidelines, communication standards, and 360-degree review processes to overcome this turnover culprit. Strong management transparency leads to 30 percent better employee retention, according to recent research by TINYpulse. Offering 360-degree transparency with opportunities for bonuses and employee incentives aids in securing motivated new hires and retaining top talent. It’s difficult for employees to become invested in something they have little or no ownership over — that investment is critical to engagement, and ultimately, retention. Employees are more likely to stay in an organization where they can trust management and senior leadership, so not only is transparency the foundation of strong peer and leadership relationships, but it is a retention driver, too.
In conclusion, one of the most effective ways to lower the cost of turnover is to lower the rate of turnover- no matter the size of your organization. Focus on fostering an engaging, rewarding and balanced work environment that inspires employees to stick around and do their best work while they’re on your team. If the employees in your organization are highly engaged, they’ll often become some of your best brand ambassadors. For talented individuals looking for great places to work, one of the most powerful recruitment tools for your company is when employees voluntarily make positive comments about their workplace and their coworkers.