How Investing in Employee Retention Can Cut Costs
If employee retention isn’t at the top of your list of business priorities, you could be giving up money that might be better used elsewhere in your organization. According to a report cited by the Society of Human Resource Management, this year more than 40 million American employees — more than one in four workers — left their positions to work elsewhere, amounting to some $600 billion in the costs of employee turnover.
What’s behind this wave of employee departures? Reasons vary from person to person — and company to company — but there are a few common concerns:
- Dissatisfaction with one’s job responsibilities and/or employer
- Inadequate benefits offered by the company
- The “grass is greener” allure of jobs elsewhere
- Changes in personal life (new family, need to move away, etc.)
- Lack of possible advancement within the organization
The good news is that employee retention is within every employer’s grasp, provided they more closely understand the reasons why employees might leave and commit to a healthy, collaborative culture where people are recognized and rewarded for their hard work.
An investment in benefits and assessments aimed at employee retention can generate major savings in terms of recruitment costs. Here’s a look at some proven retention techniques and strategies, as well as a glimpse of new and emerging HR trends in this area.
Improve Your Communications and Outreach Efforts
Job dissatisfaction often arises due to a lack of communication between employers and managers and the people who work for them. Employees want honest, substantial feedback on their work. When they hear nothing for long periods of time and are suddenly faced with a critical assessment, they’re likely to react unfavorably. On the other hand, a steady stream of constructive feedback helps promote engagement and a willingness to improve job performance.
Provide Benefits that Meet or Exceed Industry Standards
In a tight job market, employers can’t afford to skimp on benefits for new hires — especially the types of benefits that make them feel valued and loyal to the organization. Proper health coverage and paid sick leave are just the beginning. Other key benefits that succeed in luring and retaining employees include:
- Stock options or other financial incentives
- Flexible work schedules
- Health and wellness perks
- Attractive family paid leave policies
- Bonuses for outstanding performance
Offering employees anything less than a competitive benefits package will discourage them from staying with your business long term.
Improve Your Early Assessment Process
Employee retention is improved whenever a company hires an employee who’s clearly a good fit for the organization. Of course, that compatibility can’t always be predicted, but a host of job audits can help improve the odds significantly. As part of the hiring process, be sure to include assessments of the job candidate around behavior, cognitive reasoning and hard skills, and tailor your recruiting efforts around the results of these assessments.
Enhance your Employer Branding Efforts
Pay close attention to how your business is presented online and how it’s perceived by job candidates. Boost your social media efforts to frame your culture in a favorable light by emphasizing employee activities, opportunities for advancement, a collaborative work culture and a healthy work-life balance. Take opportunities to give back to the community in which you work and feature those activities on various media platforms.
Improve the Onboarding Experience
Once candidates are hired as employees, it’s essential that they become as familiar as possible with your culture and policies. This is where some employers fall short, thrusting hires into a new work environment without sufficient preparation.
Effective employee orientation gives these new hires a chance to learn about the organization and meet others with whom they’ll be working, and it provides them something substantial to do in those first few critical weeks. All of these strategies help new employees bond with the organization and increase the likelihood they will stay on for the foreseeable future.
Commit to Flexible Work Schedules
Some businesses still adhere to traditional work schedules, but many other companies recognize that employee retention can depend on being more flexible in this area. Alternative scheduling eliminates the 9-to-5 work patterns of the past in favor of a variety of different approaches such as enabling employees to work either remotely or from their homes, changing arrival and departure times and offering compressed workdays and telecommuting opportunities.
By implementing flexible work schedules, you send a clear message to your best employees that you appreciate their contributions to the business and wish to do everything possible to help them succeed.
The Simple Truth
The underlying principle of employee retention is simple. If you want to keep your rock star employees, treat them like rock stars. Give them solid reasons to stay with your company and your retention rates will likely improve significantly