How to Improve Employee Retention Rates at Your Company
October 29th, 2021
As employee turnover rates climb to alarming levels. many companies have been forced to grapple with an uncomfortable reality – they’re simply not doing enough to retain their talented workers. If you own a business, this should be a serious concern for you. High employee turnover rates will have a tremendous cost to your business – both financially and in terms of the non-monetary fallout associated with a team member quitting.
Conservative estimates place the cost of replacing an employee who quits at one half to two times the annual salary of the employee. When higher level employees (with larger salaries) quit, the monetary cost becomes exponentially greater. In addition to this financial blow, your business faces a variety of costs which can’t always be quantified with a dollar figure, including:
- Lost productivity while you’re short staffed
- Time your team spends interviewing, hiring and training a replacement
- Lower productivity rates and errors from the new employee as they get up to speed on the demands of the job and your company’s unique processes
- Negative impact on employee morale for the rest of your team due to burnout and high turnover (which can lead to additional employee turnover)
Clearly, the consequences of high employee turnover rates can be very detrimental to your business, and it’s crucial that you take the steps necessary to attract and retain quality employees. As many companies have shifted to a remote working environment over the last year and a half, it has opened up the pool of available candidates you can hire. However, this also means that anyone who is unhappy working at your company also has more new opportunities available to them. With the barriers to changing jobs at an all-time low due to remote opportunities, employee retention must be a high priority for every company.
Creating an ideal work environment that keeps your employees happy and prevents a high quit rate can be challenging to navigate. Fortunately, there are some strategies you can implement that will help you achieve this goal.
Hire the Right People
A surefire way to have unhappy employees who don’t stick around is to hire people who aren’t a fit for your company culture. Therefore, it’s crucial to evaluate cultural fit as part of the hiring process. While you certainly need to make sure you hire individuals who possess the skills and experience necessary to succeed at the position, it’s equally important to prioritize a values-based hiring process. This is the best way to ensure you’re hiring people who will fit with your culture.
During the interview process, make sure you ask a variety of behavioral interview questions that will give you an indication as to how the candidate will handle certain types of challenging situations, how they deal with conflict, and how likely they are to thrive in your work environment. You may also want to consider asking candidates to take a behavioral assessment to get a better sense of whether they are a good personality fit for your team.
This may result in a slightly longer hiring process, but if it increases the likelihood that your new employee will be a good fit and stay at your company longer, it is well worth the effort.
Offer Competitive Salary and Benefits Packages
Salary and benefits are no longer the only criteria many individuals value when determining whether they want to accept and stay at a job. However, they are still important, especially with the cost of living rising rapidly in many parts of the country. People still want to be compensated well, and they need to be able to afford to live comfortably. If you don’t pay your employees a competitive salary, they will most likely look for someone who will.
When hiring new employees, make sure to conduct some market research on wages based on similar jobs in your region. This will help you keep your salaries competitive with other employers. In addition to a competitive starting salary, you should consider giving your employees meaningful raises, especially when their performance warrants it. If your employees know they’re only likely to receive a standard 2-3% wage increase every year, they may come to the realization that the only way to earn a significant bump in pay is to move on and take a position at another company.
In addition to a competitive salary, it’s also important to provide a good benefits package. This should include competitive medical/dental benefits, but there are many other benefits you can offer that will make your job more attractive to good candidates. Consider offering a generous PTO package, 401k matching, and several other benefits that many employees value.
Offer Flexible Work Options that Promote a Better Work-Life Balance
More than ever before, employees are valuing work-life balance. This is particularly true of millennials. A Deloitte study found that millennials are significantly more likely to remain at a job for five years or longer if the company offers flexible hours, and 75% of millennials stated they would take a pay cut to accept a position with a company offering flexible hours. Flexible work hours and the ability to work remotely (even several days a week) provide greater work-life balance, which can reduce stress, prevent burnout, and improve employee satisfaction.
Flexible work options aren’t always realistic in all work environments. Some jobs simply need employees to be on site and working at specific times of the day. However, if increased work flexibility is a viable solution at your company, it’s worth evaluating the pros and cons to determine whether implementing this type of policy makes sense for your business and your employees.
Provide Additional Training Opportunities that Invest in the Professional Development of Your Employees
According to research conducted at Middlesex University, 74% of employees surveyed (out of 4,300 workers) felt they weren’t receiving enough professional development opportunities to achieve their full potential in their current job. Most individuals want to grow their skills and advance their career. If they’re not able to achieve these goals at your company, they are more likely to look for a position that provides this opportunity.
Providing training and professional development opportunities shows your employees that you’re invested in their long-term success, and it provides them with additional motivation to stay at your company longer. In addition to offering these professional development opportunities, it’s important to provide your employees with a pathway for career growth within your company. Whether it is the ability to move up into higher level roles or lateral moves that might allow them to continue growing their skill set and perform a job they find more enjoyable, showing your team that they have the ability to advance will help improve employee retention.
Make Sure Your Employees Know They Are Appreciated
It’s human nature for people to want to be recognized for their hard work and achievements, and they want to feel like these efforts are being appreciated by their employer. By taking steps to show your employees you appreciate them and to recognize their accomplishments, you can significantly improve employee retention.
It’s important that your appreciation is authentic, consistent, and delivered in many different ways. You can create a system of “employee shout-outs” where team members recognize each other for their hard work and successes. You can also recognize an entire department when they are performing at a high level. Planning fun outings is another great way to show your team that you appreciate their hard work, and this gives your employees an opportunity to bond on a more personal level, which provides an additional benefit that contributes to employee happiness.
Whatever employee appreciation strategies you choose, make sure they reflect the culture and values of your company. By creating genuine moments of recognition and appreciation, you’ll make your team feel valued. This will foster a stronger work culture that makes people want to stay longer.
Premier Employer Services Can Help
Crafting a positive work environment that promotes greater job satisfaction and employee happiness is crucial to the success of your business. While the tips discussed above are great places to start, it can sometimes be daunting to overhaul your processes in order to improve employee retention. Often, working with a third party HR consultant can make this process easier to navigate. At Premier Employer Services, we can help you implement the policies and establish a culture that will allow you to keep quality employees longer.
We offer robust employee engagement services that are customized to the unique needs of your company. In addition, you’ll benefit from our exclusive Elevated Engagement Plus Approach™ focused on helping you create a more successful and inspired organization. As part of this approach, we’ll spend time with you to understand your current workforce dynamic and the unique challenges you face. Our HR consultants will then work with you to create a custom employee engagement program designed to achieve the results you desire.
Contact us today to schedule a free consultation.