Losing staff is often stressful - both for the HR department, and for the manager and team who worked with an outgoing employee. It is also expensive - often considerably so - for the business as a whole with some studies estimating that the cost of replacing an employee can be as much as six to nine months of their salary.
Let’s say you have an employee who is paid $65,00 a year. That could very well cost your company anything from around $30,000 to $45,000 to recruit, hire and train their replacement. That’s a lot of money - and shockingly some other sources put the cost at even higher, putting the figure at a whopping two times an employee’s salary.
These numbers do depend on the employee, their level and pay grade, and the industry but it’s fairly safe to say that no business in its right mind wants to be handing over those kinds of sums, especially unnecessarily. So what can be done to minimize the risk of employees quitting on you and your bank account taking the blow?
It’s time to take a good look at your employee retention strategies. And if you are finding that you’re losing a frighteningly high number of staff, it might just be time you upgraded those strategies and approached them slightly differently.
Don’t go! Retention strategies to increase employee loyalty
Offer a competitive salary and benefits
No employee wants to feel underpaid and undervalued and it goes without saying that if you want to attract, and retain, decent staff, then you need to pay them fairly. Indeed, a survey conducted by Glassdoor in 2018 found that salary was the main reason that 45% of employees handed in their notice. Read more: Why You Need to Start taking Company Reviews Seriously
However, when it comes to Generation X - i.e. those born between 1965 to 1980 - just 24% of them said that they were financially motivated to stay with a company. Having said that, more than half of employees asked said that receiving benefits such as insurance or health care were reasons for remaining with an organization.
If we look at these stats we can see that money does indeed talk - as do benefits that are perceived as actual benefits (rather than, say, fruit and snacks on the house.)
But is that all you have to do? Solve your employee retention problem by giving everyone a pay rise or offering a health insurance policy? While it is important to remain competitive within your industry, this isn’t the only retention strategy you should be employing.
Why? Because this could be prohibitively expensive - and there are other ways to ensure your employees’ loyalty beside just throwing cash at the problem. For example…
Instill a culture of leading by example
If you want to retain your employees you need to make sure that your managers, supervisors and team leaders are exactly that: leaders.
A superior who leads by example is far more likely to contribute to greater employee retention than a stereotypical ‘boss’. The clue is even in the words. Employees will be far more likely to follow, and respond better to, an effective leader than they will to a boss who issues orders, focuses on numbers not people, and doesn’t seem to be pitching in.
And employees who are managed by someone who leads and inspires confidence rather than a person who takes a hands off and authoritarian approach are more likely to be happier and more productive in the workplace. To create this culture you will need to make sure that your leaders know, and offer information about, the company and its goals and path forward. They should be customer AND employee-centric, building high quality, personable and engaged relationships with both.
Your leaders and managers need to be able to manage but they also need to back up their hard skills - what makes them great at performing their job - with their soft skills, i.e. what makes them good with managing and motivating people.
They must have the ability to tackle challenges and overcome obstacles in a calm and professional manner and they need to provide their team with schedules and structures so that no one is left floundering in the dark.
This will only cause employee disengagement - and as anyone working in HR knows, disengagement can swiftly lead to non-productivity, dissatisfaction with the job and company, and will often result in a resignation.
Read more: 10 Ways to Motivate Disengaged Employees And that brings us on to…
Create better employee engagement
So as well as ensuring your leadership team is on point, how else can you help ensure that employees are engaged and not scanning the job ads online every moment their manager’s back is turned?
Your staff have to want to be part of your organization and part of their team. A bad boss isn’t going to make that happen - you can’t simply tell people to be more motivated, you have to create a reason for them to care.
You can boost retention rates through employee recognition. Giving praise for a job well done is one way to let your people know that you value them. Tell the team, make a point of mentioning how this person has gone above and beyond in the internal newsletter. Say thank you with a gift card to the local coffee shop.
Ask your employees for feedback. This is another way to show your people that you value them - that you value their opinion. Crucially, however, feedback, or at least the valid and viable sort, needs to be acted upon otherwise you’ll just be seen as paying lip service which will likely have the opposite effect.
Training is also a good way to increase employee engagement. Provide opportunities for staff to increase their knowledge and business acumen. But remember that training an employee on how to do their job isn’t the same thing. That type of training is a necessity. But offering them the chance to take a course in a subject of their choice - it doesn’t even have to be work related - will buy real engagement and loyalty.
If you’re worried about the costs spiraling out of control, you could instead set up company-wide training so that Ravinder from Sales gets to learn more about what Matt’s work as a backend developer consists of, and so that Lauren from the HR department gets to know more about bookkeeping from Andrew in Accounts. Remember that people are motivated by goals, not dead ends - and that means having something to work towards, whether that’s acquiring new skills or knowing that there is the opportunity for career advancement within the organization.
And don’t forget, creating employee engagement isn’t just something you want to be doing once you spot signs of disenchantment. It should be done proactively from the very beginning of an employee’s relationship with your company.
That means engaging with brand new hires even before they arrive for their first day at work by sending welcome emails and helping them to get settled in and feel welcome with a great onboarding process and a workplace buddy.
Exercise empathy towards your employees
Have you ever had a job where you felt like you spent all your time at the office? Maybe your home life bore the brunt of your work pressures and your personal relationships, hobbies and other areas of your life suffered as a result. What were your feelings at the point when you began to realize that your work-life balance was...well...seriously unbalanced. Those negative feelings about your job, manager and/or company started to rear their ugly heads.
This is where asking for feedback from your employees also has a part to play. It will help you gauge what’s going on with your people. And it is only then that you can begin to address any issues.
Of course, this is another problem where money could help remove some of the grievances felt by an employee who feels that the balance has been tipped in the wrong direction.
A salary increase can make the employee feel that the imbalance is worth it, however not all people will feel this way and you could be better off in the long run (and anyway, how long until the resentment starts creeping in again and they finally quit?) by addressing the issue directly. Could you offer a policy of duvet days so that burnt out employees know they can take a day off if needed? How about implementing flexible working so that staff with families can work around their children and childcare commitments with more ease?
Be a place where people are proud to work
The days of showing up to work, punching a clocking-in card, working, going home and repeating are coming to an end - in many industries at least. So too is not giving a hoot about the company you work for and its ethics.
Many Millennials and Generations Z and Y prefer to see themselves as part of the solution as opposed to part of the problem and genuinely care about the organization they work for. Creating a caring company culture - and not just one that cares about your employees - will go a long way to helping retain great staff.
Create a program that supports your local community, a charity or a cause. Get employees involved. Their commitment to the program will mean they are just as likely to be committed to your company. Involvement also helps team building and will help foster greater communication, and better working relationships between those involved. If you’re struggling to come up with ideas, get the workforce involved as this will be a great way of creating even further engagement and loyalty to the cause. Ask what they’re interested in: environmental issues, homelessness in your local area, equality, mental health, combating disease?
Then come up with a way to help your cause - again, ask your people. Will you donate your time or products? Will your people create a volunteer taskforce? Will you pledge to be eco-friendly or committed to equality and diversity?
The bottom line is that most people care about the place they work. They want to enjoy their job - and let’s be honest, nobody likes updating their CV and having to slog their way through a job hunt and its ensuing application and interviews.
And by following the pointers above, you could be winning on all counts: drastically reducing the costs associated with replacing your revolving door of leavers while creating a more engaged and loyal workforce of people who genuinely care about their job and your business.