But hiring great staff is only half the battle and companies must fight hard to retain their best staff to help their business keep growing. With the job market being hot right now, what can companies do to prevent their staff from wondering if the grass is greener on the other side?
What is employee retention?
Put simply, employee retention is a company or organization’s ability to prevent staff turnover, instead holding onto their talent rather than losing it to their rivals. Companies with better employee retention levels can enjoy sustained performance and an advantage in attracting key staff. With the initial cost of training new employees an expense most companies can do without, retaining staff helps to keep turnover and associated staff costs lower.
Companies can calculate their employee retention rate with a simple equation. Divide the total number of staff remaining after a certain period by the total number you began with for the same time, then times the answer by 100. A company’s retention rate that began the financial year with 55 employees and ended it with 51 looks like this:
(51 / 55) x 100 = 92.7% retention rate
So how do companies improve their employee retention? These essential business upgrades are exactly what the doctor ordered.
1. Nailing recruitment and development
The best way to hire the right people is to hone and refine your recruitment process. Not only should the process be effective in helping you find the right candidates but it must also not be too long or drawn out as this can make people look elsewhere.
It’s useful to glean from an interviewee more information about their career aspirations and in particular, whether they’re looking to gain experience from your company to add a skill to their CV before hopping onto another job or if they are looking to grow with you. Consider partnering with a professional recruitment team with experience and expertise in your specific industry to help improve your hiring process.
But once staff are in the company it’s also essential to develop their skills and progress their careers. Businesses looking to reduce their turnover rate must help people not only do their jobs better but feel a sense of development and achievement as the months and years pass.
A staff member who feels they have stagnated may be looking for an opportunity elsewhere to further test themselves if there are no such opportunities from within. Companies must invest in training and then implement the new skills into their processes to ensure this information is retained.
2. Fair compensation and attractive benefits
Modern employees are more concerned with finding a good fit for their job and company than before. Today, people are looking for a better work-life balance, attractive work benefits, and the companies they work for to be socially and environmentally responsible.
On top of this, many people are seeking jobs that provide a living wage, with over 11,000 companies in the UK already voluntarily implementing this. Upgrading your business by offering competitive pay and more attractive benefits can impact retention greatly.
Benefits like health insurance can go a long way to appeasing anxiety and stress that some staff may have about their well-being if they get sick. Perks like a breakout room that promotes gentle exercise help staff unwind and build relationships.
Flexible benefits may differ depending on your budget and smaller companies can’t compete with large organizations. Instead, simple perks like remote working or scalable benefits based on company performance and targets can still make an impact. This creates a positive perception of your rewards package without becoming a millstone around your company’s neck.
3. Creating employee wellness initiatives
Companies can develop a wellness program for their staff to help people feel valued and a core part of the organization they work for. Designed to encourage healthier lifestyle choices in the workplace and beyond, a company wellness program is the perfect business upgrade to promote retention and boost recruitment.
Statistics show that 28% of people say they’ve left a job in the last two years because of its impact on their mental health, so finding ways to reduce or eliminate it can stop staff from looking elsewhere. Successful company wellness programs make staff feel like they can achieve their goals, feel cared for by their employer, and encourage acceptance in the workplace. In return, staff will be more productive, have better morale and teamwork will be improved.
Examples of workplace wellness programs include:
- Financial counseling
- Healthy snack provision
- Wellness challenges
- Yoga or meditation classes
- Nutrition education
- Community service activities
- On-site childcare facilities
4. Communication is key
It’s easy to underestimate the importance of effective communication but in truth, it’s one of the most critical aspects of employee retention. Companies should seek to upgrade their communication channels as quickly as possible to ensure that, more than anything, people understand what is expected from them.
Open lines of communication mean staff are more likely to feel comfortable asking questions if they aren’t sure about something and are better prepared for their tasks. Consider a mentorship program to further boost retention with just 8% of workers employed for 2 years or less quit if they had a mentor compared to 26% for those without a mentor.
Communication is a two-way street and companies can look to improve the way they inform their staff through actionable feedback. For example, a manager may simply say to a member of their team that they expect them to perform better next quarter.
But this is a fairly ambiguous statement and a better way to communicate would be to set specific, related and measurable goals to define that improvement. Companies can also benefit from more direct communication from the high-level management team about how the business is performing and how their role is helping to contribute to overall success.
5. Management training programs
Similar to improved communication, companies that develop management training programs can help staff feel better supported and more likely to remain where they are. A lack of support and adequate leadership from managers is a big contributor to staff turnover. Investing in effective management training is a smart upgrade that not only boosts employee retention but also the soft skills of your senior staff.