4 Elements of Employee Retention
How much does employee turnover cost US organizations? The short answer: a lot. It’s estimated that it costs about 1.5 to 2 times the employee’s salary to replace them. Let’s say you are heading a 100-person company with an average pay of $50,000 with an average rate of attrition. You could be looking at $600,000 – $2.6 million in turnover-related costs per year. But the positive news is that it is a problem that can be easily fixed. Understanding the elements of employee retention empower your business to find – and implement – the solutions you need.
Elements of Employee Retention
Employee retention does not happen by accident; people are no longer likely to stay with the same employer for decades, like their grandparents, and retire with a gold watch. Most will hold an average of 12 jobs throughout their career. Given the “Great Resignation” of our current times, it is more critical than ever that we treat employees like the valued assets they are. In addition to money, when a team member leaves, it takes months (or longer) for the new hire to get up to speed – not to mention the thought leadership and intellectual capital of the departing person.
That said, there are ways you can keep your employees in the critical roles they fill.
Look at Recruitment
Effective retention starts with effective recruitment. It is mission-critical that new hires have the support they need (i.e. training, mentors, connections, resources, etc.) to succeed. A strong onboarding process ensures that people get acclimated, and feel comfortable, in as streamlined a manner as possible.
Hiring for fit is essential; when recruiting, screening, and interviewing candidates, look for so-called “soft” qualities that indicate a person will be a positive addition to your staff. This includes factors like effective communication, problem-solving, flexibility, a teamwork mentality, etc.
Evaluate Your Compensation Structure
One of the most important elements of employee retention. Research indicates that pay is not the most important factor in retention – but there is no doubt it plays a significant role. The reality is that employees are less likely to look for other opportunities if they are properly compensated for their work with your organization. What do you offer in terms of wages/salary, as well as benefits, including paid time off and flex-time? Is it time for a change in policy?
Prioritize Work-Life Balance
The days of people being married to their jobs are not over – but there is a distinct shift in priorities. COVID played a role as folks spent more time at home, with family, and with their close circle. They want a life! And in providing the time and flexibility for them to enjoy it, you get happier, healthier, more productive, and more engaged employees. So, if your managers routinely send after-hours emails, if your expectations extend beyond the workday, and if you don’t allow remote work when feasible… you need to rethink your current strategies and positions.
Build In Opportunities for Development and Advancement
Do you know anyone who wants to be in a dead-end job? Sure, you probably do. But do you want them at your organization? No, you probably do not. You want people who are motivated, engaged, and eager to contribute to your company’s culture, progress, and profitability. For these team members, opportunities for development and advancement are essential to employee satisfaction and retention.
What do these elements of employee retention look like? It could be training, courses, continuing education, mentoring, and clear avenues to new roles and responsibilities within the company. To retain the best and brightest, you need to show them that they are valued, that you are willing to invest in their futures, and that they do not need to stagnate in their careers. You want to keep them – not keep them back.
Employee Satisfaction and Retainment
What are you doing currently to ensure employee satisfaction and retainment? Are your efforts bearing fruit – or are you struggling with high and/or ongoing turnover? No matter where you are right now, it is important to focus on and continually improve your strategies. The bottom line is that you need talented people to power your company forward. You need to implement these elements of employee retention ASAP if you haven’t already.
From there, you need to learn how to keep them where you need them. Contact AMB Performance Group for more information, guidance, and effective strategies for employee satisfaction and retention.