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How to Retain Employees and Improve the Overall Employee Experience
While job vacancies continue to reach record-setting highs, companies struggling to hire enough staff are beginning to feel the pressures of increased consumer demands. When McKinsey asked businesses why employees quit, many listed their leading causes as low pay, poor work-life balance, and health concerns.
Furthermore, 40% of the respondents indicated that they were somewhat likely to quit their job in six months or less. Out of all the reasons for quitting that were reported, the top 3 reasons that were listed by over half of those surveyed were:
- Not feeling valued by their organization (54%)
- Not feeling valued by their managers (52%)
- Not feeling a sense of belonging (51%)
Talented people are scarce and societal shifts taking place in the labor market have made recruiting and retaining top talent increasingly important. Aside from the ongoing labor shortage, baby boomers that are still employed are getting closer to retirement and digital transformations have introduced a massive skill gap across the workforce.
The Cost of Poor Employee Retention
According to Gallup, 6 out of 10 millennials will job hop at the first chance they get–– a staggering statistic that indicates at least half of your staff could be actively looking for a new job at any given time.
Employees want a satisfactory experience, but it comes at an expense. According to Gallup, the average estimated cost of replacing one employee ranges from one-half to two times their annual salary. This analysis reveals that if your average employee salary is $50,000, then the cost of losing and retaining one employee could range between $25,000 and $100,000. With some simple math, companies can discover how losing 2 or 3 employees at once can be detrimental for their business.
Here are some key factors that affect employee retention:
- Poor recruitment
- Lost productivity
- Hiring errors
- Cultural impact
- Insufficient onboarding
- Lost engagement
- Training expenses
The cost of poor employee retention goes beyond monetary value. If your company loses your top talent, it means you've lost your most reliable problem solvers and innovators. Without their leadership and influence, internal company morale can break down, resulting in lost customer relationships. And of course, there is always the threat of competitor organizations that poach your top talent which can result in further disorganization within your company.
The good news is that your company can improve your employee experience and fix the issues that provoke a high employee turnover rate within your organization.
How To Retain Employees: 3 Strategies
1. Leverage data to identify risks
Cloud-based business software collects massive amounts of data. As a result, learning how to retain employees by leveraging data starts with the Human Resource Information System (HRIS). Accessing HRIS data can help your company identify high-risk areas within your organizational structure.
Your company can identify the rate of resignation and its effects on your business metrics department by using descriptive analytics. Start by determining who, when, what, and where the turnover stems from. For instance, the HRIS might indicate that employees between the ages of 25 and 35 have the highest turnover rates, most of whom are from the operations department. This means that your company can then use this data to act accordingly.
Consider whether individual check-ins with employees, focus groups, interviews, or surveys can help identify the root cause of the turnover and prepare to discuss:
- Value alignment
- Professional development
- Employee recognition
- Advancement opportunities
- Competitive compensation structure
Poor relationships amongst colleagues or managers can also contribute to a high turnover rate. It's important to figure out the "why" so your company can determine if you can implement mitigation strategies for certain employees.
Once you know your employees' pain points, using your HRIS data to identify the departments with the highest retention rate can be the next step. These departments can serve as primary company examples and help teach your problematic departments how to retain employees, boost their morale, and improve their overall experience. Additionally, adopting strategies that directly target the pain points of your employees can be an effective way to resolve a high turnover rate.
2. Talk to employees about growth and development
Exit interviews show that at least 50% of employees that are ready to leave would stay if their managers or the organization provided better working conditions. The primary topic of concern, in this case, is employee development and satisfaction.
The most significant part of employee development is consistently meeting with employees to determine whether the available development programs meet staff expectations. Companies should listen and document the feedback they receive and make adjustments when necessary.
Promising an engaging, attractive, flexible, and on-the-job development program is not a value proposition to be taken lightly. Workers today prefer meaningful and worthwhile opportunities in addition to their basic needs and wants.
When it comes to new hires, examine their strengths and determine those with multifaceted skill sets, creating development programs aimed at strengthening these skills. Look for the agile individuals and those with an easy acceptance of change. Once your company has a better idea of how your new employees envision growing within the organization, start connecting with managers to facilitate tasks that cater to employee training and development.
The best strategy is to create career paths for each department that map out the necessary skills for each course and create training and development programs that consider each department's needs. Then seamless communication channels can be created between your employees, managers, and HR department.
3. Know how your employees want to be rewarded
The value proposition your organization offers is critical for long-term employee satisfaction because it nurtures a sense of belonging, resulting in an estimated 51% drop in attrition. An effective way to show your employees they belong is to offer rewards for a job well done. Some examples of rewards that your company can offer are:
- Paid maternity and paternity leave
- Remote work
- Training and development stipend
- Paid time off for community service
- Mental health providers
- Stock/ownership options
- Expense-paid trips
Prioritizing and implementing such incentives will establish your company as one that cares about the overall wellbeing of your employees. As a result, your employees will feel appreciated, valued, and seen, which will ultimately result in better employee retention.
Employee tenure often depends on a variety of factors such as workplace culture, management practices, positive reinforcement, salary, and more. If your company is experiencing a higher turnover rate than usual, then it may cause major discrepancies within the organizational structure of your company. Even though this can lead to a decrease in overall productivity and an increase in company-wide losses, it is something that can be fixed. If your company implements a strategy that prioritizes employee experience, then your company can reap the benefits of long-term efficiency.
Visit our blog to learn more about employee retention and other useful business management tips.