It's no secret that employee turnover is expensive. Losing highly qualified employees means losing the productivity and talent they brought to the table. It means conducting time-consuming interviews. It means training and onboarding new hires. It means waiting the months or years it takes for a new person to reach the level of impact that their predecessor achieved in that same position.
This process can sometimes bring even greater talent into your organization. But almost without exception, replacing a competent employee costs more than keeping them around. The question is what your business can do to keep top-quality talent on your payroll. Here are eight employee retention strategies you can implement right now to boost your company's employee retention rate.
Improving your company's employee retention rate is only worthwhile if your employees are worth retaining. If you are hiring the wrong people, you are either going to have to fire them or they are going to leave of their own accord. Either way, you will be back to square one. The first step toward employee retention is shoring up your hiring and screening processes.
Use an interview process with two or three stages of interviews instead of one. Use reference checks and skill tests to assess qualifications and culture fit. And sit down and sketch out a consistent and comprehensive background check policy that includes criminal history checks and verifications of education, past employment, and professional licenses. These steps will help you hire the right person the first time around.
Salary and benefits are the elephants in the room during any conversation about employee turnover and retention. If your business can offer higher salaries, doing so will certainly help attract and retain top talent. If not, try to get creative with your benefits package. For instance, offering telecommuting, flextime, and creative time off options will all boost work/life balance—often a huge factor for employee retention.
Bad hires are a top cause of employee turnover, but if you are losing good people left and right, you need to look at the managers. If many of your recent departures came from one department, there's probably a correlation. Micromanagers are poison for employee retention. Team leaders who strand their employees in meetings all day or send strings of emails to "check on progress" are well-meaning, but they often kill productivity and make their direct reports feel disrespected and disempowered. If a manager's helicopter tendencies are driving talented employees to the exit, it might be time to reconsider that person's value to your company.
If you want to find out why employees are leaving, the best people to ask are your employees. Do exit interviews with ex-employees to find out what drove them to search for new opportunities, or ask existing employees what you can do to improve the work environment. You will hear a slew of responses spanning every possible category from management to air quality to décor. Take these comments into consideration when brainstorming ways to make your business a better place to work.
Many job seekers today aren't just looking for a job and a paycheck. They want to feel excited about coming into work every day. Company culture is a big piece of that. If the atmosphere of the office encourages socialization, teamwork, innovation, and creativity, that's a bigger draw than an office where no one talks to each other.
The people you hire and the friendships they form are going to establish the culture of the office. You may not have direct control over these factors, but you can create an atmosphere in which office friendships are encouraged. Look for opportunities to get employees together for social activities outside of work, and try to create a unified company vision that everyone can care about. The more connected your employees feel to your business and the people who work there, the less likely they are to leave.
People want to feel valued by their employers. They also want to feel like they are growing professionally at a steady clip. Emphasizing learning, training, and employee development within your organization kills two birds with one stone. Footing the bill for employee learning opportunities shows that you are invested in their success. Employees who are consistently picking up new skills or leadership abilities feel like they have real momentum in their jobs. Both factors improve employee satisfaction and reduce restlessness, ultimately helping with retention.
Speaking of making your employees feel valued, it's important to recognize and reward high-quality work. Regarding monetary rewards, you can't ignore or withhold raises or bonuses when they are truly deserved just to cut corners. If your business is doing well and there are a few people who have helped you get there, you need to recognize that. However, monetary rewards are not the only way to recognize quality performance. Employee of the month programs or gamification can foster healthy competition within your team. These programs push people to work harder, improve the overall quality of work, and make your top talent feel valued and validated.
While micromanaging is undoubtedly a bad thing, that doesn't mean "no management" is the right solution. Managers should plan to meet with employees for regular one-on-one sessions (usually monthly or every few weeks) and should schedule reviews on a quarterly basis. Regular one-on-ones give managers a chance to check in on employees without smothering them.
Quarterly reviews give workers the opportunity to set new goals, propose new learning and development opportunities, and raise any grievances they may have. These meetups keep the lines of communication open and make sure everyone is on the same page, eliminating much of the confusion and frustration that often leads to employee turnover.
You are never going to have an office where no one leaves. People retire. They move away. They go back to school. They decide to start families and cut back on work. However, by emphasizing employee retention, your company can eliminate many of the departures that truly are avoidable. Implementing the eight strategies described above is a perfect way to start.