Creating an Employee Retention Plan
Let’s talk about how to build an employee retention plan. When you think of your company’s most valuable assets, what comes to mind? When you consider what makes your business successful, do you mentally review a spreadsheet of property holdings, intellectual property, equipment, technology? Or do you think of people? If so, you’re on the right track. Your employees are the single most important contributing factor to your organization’s ability to compete – and to thrive. They complete the day-to-day work necessary to keep the lights on, so to speak, but they are also integral in building a strong company culture, one that customers and other stakeholders want to buy into. If you do not have an employee retention plan… Today is the ideal time to start preparing for a promising tomorrow.
Why You Need an Employee Retention Plan
You are no doubt aware of the tremendous cost associated with employee turnover. When you factor in all of the costs, including advertising positions, recruiting, screening, interviewing, onboarding, and training, losing one employee can cost your company thousands or tens of thousands of dollars. The more advanced the position, the larger the price tag for turnover.
Additionally, you lose time and momentum. It takes months to hire and onboard an employee; it can take a year or two for them to get fully up to speed. That’s if they stay. Over 30% of workers quit within six months, according to estimates. Further, we are living in the age of the “Great Resignation.” Over half (55%) of employees say they want to change jobs. With this level of internal turmoil, it is exceptionally difficult to form the connections necessary for collaboration, morale, and productivity.
This does not have to be an inevitability. There are steps you can take to buck the trend and improve employee engagement and retention. This is the goal of your employee retention plan.
5 Components of a Strong Employee Engagement and Retention Plan
How do you keep the talent you need to serve customers and build your business?
Focus on Work Culture and Environment
No, we’re not putting dollar signs first. We’ll get there in a moment. For now, job #1 is to create a company for which people want to work. You don’t need a Google-sized budget, along with complimentary meals and snacks, free cooking classes, onsite massage therapists, and “decompression chambers”, to create a compelling workplace. You do, however, need to supply workers with what they truly want and need. Chief among these is a viable work-life balance – and policies that back it up.
For example, many employers tout work from home policies – but they make a habit of emailing and calling “after hours.” While flexibility is key, people need time for… life. If you do have remote and WFH options, be sure to honor employees’ downtime.
In the workspace itself, consider your layout, ensuring it is comfortable and conducive to work. This includes offering space for both collaborative efforts and private time to think, conduct calls and meetings, and think.
People don’t really quit jobs; they quit other people, particularly supervisors. To retain employees, start by coaching and training leaders to serve as guides and mentors for employees. While they don’t need to become “friends,” they do need to foster relationships built on trust and respect. Leaders should be there for the betterment of employees.
Offer Opportunities for Growth and Development
Believe it or not, one of the most important factors that influence people to stay at jobs is not money, but the ability to learn, grow, develop, and advance. Few want to stay at a position that is “dead end.” While some may be content to clock in and collect a paycheck, the people who will propel your company forward want the opportunity to expand their skills, build their experience, and have a chance to take on more responsibility.
Review your internal trainings, continuing education programs, and options for advancement within the company. The more opportunities people have to grow, the better your retention rates.
Think beyond “Employee of the Month” platitudes. Make employee recognition a conscious initiative that is timely, specific, and meaningful. For example, if a team member is putting in extra time and effort on a big project, take the time to acknowledge that. A simple “I noticed how much you are doing, and the quality is great. You’re doing X, Y, and Z, and it’s making an impact” works wonders in terms of motivation.
Recognition isn’t monthly. It’s ongoing.
Compensation DOES Matter
When all is said and done, employees need proper and fair compensation for the work they are doing. Your salary/wage structure should be equal to or above that offered by your competitors. Depending on the role, it must also include other forms of compensation such as insurance, paid time off, and parental/family leave.
In today’s employment climate, you may have to increase payroll and associated benefits in order to attract and retain talent. However, do realize that after a certain point (i.e. employees can afford to live and work and do so comfortably), monetary benefits are superseded by workplace culture benefits. Meaning: if you offer competitive compensation, your other employee engagement and retention initiatives will yield greater returns.
When it comes to an effective employee retention plan, money does talk. But it doesn’t necessarily speak louder, or more eloquently, than other benefits. Workplace culture, relationships, growth potential, recognition, and other factors play a large role in ensuring the talent you hire stays around to help you grow.
For more information on employee engagement and retention, connect with AMB Performance Group. Let’s build a better tomorrow… starting now.