Posted by Neha De
August 31, 2020 | 5-minute read (980 words)
Every month, approximately three million Americans quit their jobs in search of something better, and 31 percent of employees leave their positions within the first six months. On top of that, it costs as much as 33 percent of a worker’s annual salary to replace them, according to Work Institute’s 2017 Retention Report. These numbers can — and should — be scary for employers.
With such low unemployment and high attrition rates, it’s becoming increasingly difficult to find good talent, and even more challenging to keep them onboard. Therefore, it’s crucial that HR managers and department heads do everything they can do to manage their staff members in a way that helps them retain their best talent.
Your ability to retain your employees should be a primary indicator of the health of your business. So how do you hang on to excellent team members and make them stay for decades? Consider these ten employee retention strategies:
1. Hire the Right People
The first step in retaining your best talent is hiring the right person for the right job in the first place. And to ensure that the hired candidates are qualified enough to make effective contributions to your company in the long run, it’s essential for recruiters to go through all the stages of the recruitment life cycle: namely, workforce planning and preparation, sourcing, screening, interviewing and selecting, hiring and onboarding.
2. Offer Fair Employee Compensation
A survey by Glassdoor of those in recruitment, HR and hiring found that nearly half (45 percent) note that salary is the top reason for employees changing jobs, followed by career advancement opportunities, benefits and location. Hence, it's important that you offer attractive compensation packages, especially in a competitive labor market. Apart from competitive salaries, a healthy compensation package includes bonuses, health benefits, retirement plans and paid time off.
3. Ensure Smooth Onboarding
Every new employee should be set up for success from day one. Sesil Pir, founder and principal consultant of Whirling Chief, says, “Effective onboarding can make or break a new hire." The onboarding process should teach new hires not only about the job but also about your company culture and how they can contribute and grow. Therefore, keep your employee onboarding program concise and organized, and ensure that it begins prior to their arrival on day one.
4. Keep Communication Lines Open
Keeping the lines of communication open at all times is a great strategy for employee retention. When employees feel that they can approach their managers with questions, ideas and concerns, they get a feeling of belonging.
On the other hand, their superiors should be honest and open with them about improvements that they need to make in their performance. Hence, it’s essential for them to connect with their direct reports on a regular basis and discuss their performance issues, instead of waiting for the annual review meetings to bring up issues.
5. Offer Work-Life Balance
Work-life balance has become extremely important to staff members. You must accept that your employees have a life outside of work, and if you keep asking them to come in early and/or work after hours, they will eventually start looking for opportunities elsewhere.
Offer remote work options and flexible work schedules to your employees and you may find that they are more satisfied and productive, and experience less conflict between their work and personal obligations. However, properly define the rules of these flexible work arrangements to avoid any ambiguity and misuse.
6. Create Growth Opportunities
When hiring for a new position, look at your current employees first. Scan the internal environment ranks to see if there are existing team members who could fit into the new role, growing to the next level. Make sure that all staff members are aware of the internal openings, and give them a chance to apply for them if they’re interested.
7. Don’t Micromanage
Often, the best way to manage your employees is to give them clear directions and to allow them plenty of room to do what they have to do, while offering feedback. If your employees feel that they are not trusted, they are more likely to leave.
Many employers have scores of rules and regulations because they fear a drop in productivity levels; however, people are often the most productive when they are relaxed and allowed to get the work done their way.
8. Set Up a Rewards and Recognition System
Every individual wants to feel appreciated for the work they do. Make it a priority to show gratitude to your direct reports when they go the extra mile, whether it's with a gift card, an extra day off or an appreciation email. You can also set up a formal rewards system that incentivizes innovation and great ideas.
9. Offer Professional Development
Your best people are already great at what they do, but they still want to continue enhancing their skills to become even better. Ensure that professional growth and development are priorities in your company, as that will lead to top talent sticking around longer.
You can set up a learning management system or build a mentorship program to pair senior-level executives with your top performers. In addition to contributing to a positive culture, you will end up creating a pool of potential new leaders from within your organization.
10. Take Exit Interviews Seriously
Employees leave for a number of reasons, and exit interviews are the perfect opportunity for you to obtain valuable (and sometimes actionable) information about what your company is doing well and where it needs to improve. Take the feedback seriously and use it to retain the remaining staff members, because, if done well, these sessions can prove to deliver a significant source of data about the health and well-being of your business. Remember, rarely will you receive such honest feedback from your current employees.