As a business owner, few things can be as disruptive as having a low employee retention rate or high turnover. While you can’t expect all of your employees to stay on board for the duration of their careers, if you feel as though your business is experiencing a revolving door of new hires and departures, it may be a sign that there is an underlying issue at hand.
It’s estimated that to replace an employee, it may cost a company roughly six to nine months of that employee’s annual salary. This loss includes the cost of the hiring process, onboarding costs, and lost productivity as other employees must fill existing gaps within workflow and responsibilities. If you have multiple employees leaving within the course of a given time, those costs can add up fast.
Being able to keep good employees around is not only essential for making profit, but for growing and strengthening your business, as well. These employee retention strategies should be practiced in order to maintain a working environment where people will want to stay:
Hire the right candidates
The first step to keeping employees is finding candidates who are right for the job. Whether you are backfilling or hiring for a new position, you’ll want to identify what qualities are essential for someone in this role, and look for talent who fit the description. When you interview candidates, ask them questions that will give you an understanding of not only their experience and skillset, but what their personalities are like. Will they fit in with the company culture? You’ll also want to give them a fair and realistic depiction of what the job entails. You don’t want someone to say yes to a position only to learn on the first day that it isn’t what they signed up for.
It’s also important to take a look at a candidate’s resume and look for any patterns of job-hopping. Do they have a history of only staying at jobs for a short period of time, or do they tend to stay in positions for a couple of years? While a resume can’t tell a complete story on its own, it can give you an idea of how long you may expect a person to stay at your company.
Onboard new employees effectively
Once you’ve found the right hire, it’s important to onboard them properly to ensure they are set up on the path of success for the job. Set up an orientation that will provide them with an introduction to the company, an overview of the organizational chart, company policies, their department overviews, as well as a benefits plan overview. This is also where they should complete important paperwork and receive items like ID cards and computers.
Set clear goals with your new hire for what they may want to accomplish within their first month, six months, and year from their start date. Be sure to have frequent check-ins on these goals, as well as in general to get a sense of how they are feeling and if they have any questions.
Also be sure to give your employee a tour, introduce them around to their coworkers, and make them feel comfortable from the beginning. You may even want to set them up with a buddy – someone who can take them under their wing as they get started.
Have strong leadership
Most employees won’t leave a company because they hate their job – most do so because they experience a difficult time with leadership. A 2017 poll found that 75% of workers who voluntarily left a position did so because of poor management and not the company as a whole. It’s plain and simple – if you want to keep your staff, you must make sure that you have solid employees in leadership positions.
This includes having managers and directors who want people to grow and succeed. This is making sure that managers are willing to listen, communicate clearly, and provide helpful feedback. Be sure to also encourage employees when they’re presenting great work and acknowledge achievements and milestones. Most employees will want to perform well if they have managers who help them build confidence and create a positive learning experience.
Offer competitive salary and benefits
Salary and benefits are certainly a driving factor for people when choosing a position – so you will want to make sure that your company is offering competitive compensation for your staff. This includes offering a salary that aligns with the job title for your specific area, health insurance, life insurance, paid vacation time, family leave, and retirement plans with a company match.
If an employee asks for a raise when they have been doing an outstanding job and there is room within the budget, rewarding them for their hard work can also be a great motivator for people to stay onboard.
Place importance on work life balance and flexibility
When choosing a job, 72% of people in a Statista survey reported that a healthy work-life balance is one of the most important factors in accepting a job. While it’s not uncommon for the occasional late night to deliver a project, it shouldn’t become expected of your employees to pull an excessive amount of overtime to finish their work. If this becomes the case, this is a major red flag that something is not working properly.
Employees should be encouraged to take vacations, enjoy their time off with their friends and family, and not have to worry about needing to stay online when they’re off work. Not only does this provide for a healthy work culture, but when employees do return from their breaks, they can be refreshed and ready for work with a clear and open mind.
It’s also important to be mindful that everyone is in different situations and may need flexibility, especially as the world continues to adapt to the new changes brought forth by the COVID-19 global pandemic. If an employee must shift hours around to accommodate family or personal needs, being flexible in allowing this change can be a significant stress relief.
Offer company perks
Are there any additional perks your company can offer? These are not necessarily things that your employees may need, but are certainly a plus if you can offer and let your employees know that you appreciate them and want them to stay. Some ideas may be:
- Commuter assistance programs
- Subsidizing gym memberships
- Offering free meals, snacks, or beverages at work
- Employee recognition programs
- Summer Fridays
- Student loan assistance programs
- Employee discounts
- Diversity programs
Just as important as it is to have company perks, it’s also important to make sure your employees know what you have to offer! Make sure you build awareness around these perks, ideally as early as during orientation.
Provide career growth opportunities
Emphasize that as your business grows, you want your employees to grow with it. By offering development opportunities to your employees, you provide them with the resources they need to meet their goals and advance in their careers. Be sure to conduct annual performance reviews so that your employees can get a sense of where they are, and what steps they need to take to move forward. Mentorship programs and training seminars can be helpful ways to engage employees of all levels in active learning.
Employee retention is essential to maintaining a healthy work environment and growing your business. When you communicate to your employees that you value them beyond just the work that they output, they will be more likely to stay for a longer duration. For more helpful business tips and resources, be sure to check out Nationwide’s Business Solutions Center.