Employee Retention Strategies That Work!
We all know that employee retention has become something of a theme in HR chats over the last few years. Whether your organisation is struggling with employee turnover, or just wants to safeguard against issues in the future - we know lots of teams are doubling down on their employee retention strategies. I’ve done a deep dive into employee retention; what it is, why it’s important and, of course, the strategies you can implement to improve yours!
What do we know about employee retention?
Employee turnover has become an increasing problem for organisations around the world. Turnover rates are increasing, so retaining great employees is becoming harder and harder.
Employee turnover rates have increased by 8.7% since 2019 in the UK and even more in the US -HRreview
Employee retention has been particularly hard in product departments with a turnover of over 32% -HRreview
The cost of replacing an individual employee can be as much as two times the employee’s annual salary - Gallup
When should you focus on employee retention strategies?
Traditionally, we know that January is a time that sees a lot of retention issues. The stats back this up:
18% of businesses cite January as the most popular month for people to leave – Glassdoor
32% of the UK’s workforce are considering moving on professionally – but most will wait until January to hand in their notice – Crunch Accounting
The most noteworthy job application spike lands on January 27, when the number of job applications grew to 75% above the daily average – Monster
The truth is you should focus on retention strategies year-round!. It’s never too soon to implement employee retention strategies to minimise staff turnover.
Why is Staff Retention so Poor Around January?
There are several factors that lead to employers and employees being glued to job boards at the start of the year. New Year’s resolutions and career discussions over the holiday period are leading factors.
“How’s everything at work?” “Did you get that promotion?” “Have you considered looking elsewhere?” These sorts of questions can be a catalyst for wandering eyes…
Timing is another key factor. Employees looking to advance their careers and employers looking for the best talent will often hold off until the holiday season is over. This is due to the “Christmas lull”, where there are fewer availabilities and opportunities. Consequently, there is a high volume of job applications in January when this subsides.
We can’t forget that end-of-year bonuses come out in the final days of the year - hence the name! Most people will avoid risking their bonus by postponing their job searches for another month.
Why is employee retention so important?
It’s not just a cost thing!
Neuroscience tells us that there are several factors at play that mean that employee retention is super important to employee happiness, engagement and productivity! This means that having a high turnover will impact employees around the business - not just the specific skills gaps created!
The neuroscience themes most affected by employee retention are Safety, Relationships and Enablement.
Learn more about our neuroscience and how these elements play together!
What causes poor employee retention?
At The Happiness Index, we believe that the cause of poor employee retention (as well as many other key HR pain points), is that HR teams aren’t thinking about the head and the heart. In other words, they’re not thinking about employee engagement AND happiness.
When employees aren’t happy and engaged they become less productive and start shopping around for jobs.
Unfortunately, this often has a snowball effect. As people start moving whether through voluntary or involuntary turnover, this affects others both on their team and within the wider organisation.
6 Employee retention strategies to try
1. Empower People to Create Change
If you want to empower your workers to create the change they want to see, then you should demonstrate faith in their abilities and judgement. By giving your people freedom and accountability for their actions you are empowering them to take ownership. This will make everyone feel valued and happy within their roles.
Empowered employees are a huge asset for any business. They are dedicated advocates for your business, who will do whatever it takes to help the company succeed. Their hard work and attitude are infectious – sometimes resulting in a domino effect which permeates throughout your business. They are huge drivers of company values and vision. This helps to create cultural alignment.
2. Communicate Regularly
The quality and regularity of communication within an organisation can directly influence your workers’ engagement and loyalty to the business. By maintaining open communication, you will bridge gaps, create a unified culture and build a stable team that wants to work within your business.
By gathering meaningful employee feedback via always-on listening surveys, you can build on successes, remedy concerns and help align everyone with your vision and goals. This will ensure you improve your retention rates.
3. Provide Opportunities For Growth
Personal growth is a key aspect of employee retention and can be an important strategy to leverage. It is difficult to improve retention and recruitment drives if your workforce feels like they are stagnating. Career development is a key component of workplace happiness and ultimately retention.
By meeting with your staff regularly and agreeing upon targets, you can build a personal development roadmap together. An effective personal development plan clearly defines the end-goal and what needs to be done to be successful.
4. Promote Work-Life Balance & Flexibility
In today’s working climate, the line between work and home can be unclear. Many employers expect too much from their people. This can result in them working during all waking hours and constantly checking their personal phones for work emails and updates. It is vital to encourage your staff to find the right balance, so they don’t burn out or have a mental breakdown. Offering flexible working arrangements and encouraging annual leave is a great way of helping staff to improve their work-life balance.
Make efforts to speak to your people to learn what you can do to make their working and home lives more enjoyable and distinguishable. This will be repaid with an increase in productivity and an improved culture – thus making you a more attractive employer.
5. Reward Your Top Performers
Pay matters! According to research from Harvard Business Review, “…10% higher base pay is associated with a 1.5-percentage-point increase in the likelihood that workers will stay at their current company the next time they move to a new role.”
It is important to offer appropriate promotions in job title, responsibility and salary to your best workers. Failure to do this may result in them looking for an employer who will offer the rewards they desire. Of course, it is not always an option to offer pay increases and there are many factors to consider. In these situations, it is advisable to communicate this with your people and demonstrate transparency.
Another option is offering your people equity in the business. This demonstrates that you value their input and want them to reap what they sow. By allowing your top-performers to become shareholders, you will ensure that they become more invested in the business. Often this will create a new breed of worker, who will willingly go the extra mile and become a loyal ambassador for the business.
Not everyone is motivated solely by monetary gains. We recommend listening to the unique wants and needs of your people. Our recognition impact survey can help with this.
6. Focus on Environmental, Social and Governance (ESG)
If you want your best performers to stay with your company, then you must ensure they align with your core values. These values should include a dedication to financial success and also to creating positive change outside of the workplace.
Today’s workers want to feel proud of their organisation. They want assurances that they’re working for a company that cares about more than just profits.
ESG initiatives help businesses attract and retain the next generation of workers. This is evidenced by a recent study by The Conversation: “More than 90% of business students … said they would be willing to sacrifice some percentage of their future salary to work for a responsible employer.”
It’s important that your team are aligned on this strategy in order to see maximum impacts so you will want to measure and improve your ESG strategy.
Businesses can improve employee retention and employer branding by implementing systems and processes that will make employees want to stay. This will result in a great culture where people want to contribute and succeed. This will ensure you hold on to your best people and recruit the best candidates!
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