As managers and leaders, we know unexpected attrition causes problems. Losing good staff is costly, hits morale, decreases productivity and distracts our focus. We conduct exit interviews, take “pulse checks” and try to understand what’s happening but without analysis and a proactive plan, the keys to employee retention remain elusive. This is where a retention strategy is the answer. You may already have one, you may have ideas about what works and what doesn’t, but there are always ways to improve.
Why is a retention strategy important?
A planned, standard approach ensures consistency across your organization; taking action before you have a retention issue means you can be one step ahead and focus on actively engaging your staff.
Employees are dynamic individuals with changing needs:
- How much they need to earn
- What they enjoy doing
- Different perspectives on their relationships at work
- Other job opportunities
While you can’t control these outside influences, you can control how much you know about your employees, how far you’ll try to meet their needs, how you treat them, how competitive you are compared to other business, and the value you add to your employees’ lives. All of which contribute to the importance of your retention strategy.
What makes a good retention strategy?
Do you understand what’s currently happening in your organization? Are you losing a lot of people or are things quite stable? Do you have performance or employee relation issues? How is morale across your senior teams and your operational teams?
What’s the demographic of your organization? What do your employees want and expect from an employer? What’s going wrong and what’s going right? These are all things your employees will value about your organization that you can build on.
A good retention strategy is personalized to your business, it answers the questions about what will engage your employees, what threats there are to losing them and is a proactive approach to maintaining your employees’ engagement. It should also talk about your disaster recovery plan when an important employee either resigns or expresses disengagement.
With more than 50% of executives saying corporate culture influences many key business aspects including profitability we see how important it is to employees in maintaining engagement and satisfaction at work. It also touches on the misinterpretation of what senior leaders believe and what employees think – emphasizing the importance for you to understand your employees initially.
Where to start with improvements?
Considering 51% of US employees report not being engaged, engagement is a key aspect to retention. There are many approaches that could be taken and an endless scope of activities which may improve key aspects such as:
- Reward culture etc.
Employee Benefit News reports that the cost of hiring a replacement for a failed hire is 33% of the annual salary. While employee retention is a hot topic, we share some key tips that you should include and improve upon within your employee retention strategy.
1. What brings your employees to you in the first place?
The hiring process is a major investment - something has brought the new hire to you and equally something has told you they’ll add value to your business. This is a key time to show your culture, your organization’s story and set the scene for how you do business. A strong onboarding and induction plan for your employee’s working-life with you beyond this can really cement the relationship and set the foundations for employee retention before day one.
2. How do you recognize and reward?
Primarily most employees come to work for a pay-check but employee retention research shows that recognition and reward goes beyond that – consider the benefits you offer and how you say thank-you and well done. These are key to ensuring that an employee feels valued and it’s not always about increasing the amounts – find out what employees really want! Is it 2% on their salary or is it more investment in their retirement benefit? Do they want a simple thank-you one-to-one or would they appreciate a more public congratulations?
3. Providing development opportunities and career progression
Employees are people, they’re only yours temporarily and as part of that they need to feel it’s worth their while. Whether as a stepping stone to a role within your organization or as part of their overall professional development. Do you know what your employees need in this respect? Employee retention can be improved by offering development opportunities within their roles and by recognizing their career aspirations. This may seem counter-intuitive – giving employees tools to move forward – but by satisfying these needs you’re cementing your place in their life and subsequently improving your retention prospects.
4. Being proactive about managing stress
Managers will manage workload by delegating and monitoring what their employees are doing. While recognizing there are busier times, sometimes the burden can become overwhelming. How managers help employees deal with this can impact employee retention rate. Times of stress can be an incredibly important time to sense how engaged your employees are, how your teams come together and how you support your employees. A key part of a good retention strategy is knowing what your employees’ needs and wants are when things are tough.
5. Encourage communication and build trust
A culture of communication and trust is key to creating an environment that employees want to work in. Creating the best retention strategy will be meaningless if it ignores these key aspects. They can be harder to control but if you’re open and honest with your employees, this will impact employee retention.
6. Remain flexible
Organizations need to focus on their employees’ work-life balance in order to be worthy of retaining them. Consider: how flexible are you? Do you understand your employees’ obligations outside of work and what they want to achieve in their personal lives? Do you give them trust and flexibility to organize and manage their lives as a whole? Flexibility is a key aspect employees consider when choosing, and staying with, an employer.
7. Consider threats – be competitive
Organizations don’t operate in a vacuum and employees will always be targets for other companies. How your organization stands compared to others is an important part of ensuring you’re maximizing your employee retention. Consider not only how you do things compared to others but what will stop your employees taking a phone call from a head-hunter?
So, what next?
So, you have a lot of ideas for your retention strategy – you’re engaging your employees and considering their needs. You’ve decided that for some employees you may offer retention bonuses to keep them onboard and for others you wouldn’t be concerned if they left. You have a recovery plan in place to make sure if a key employee did decide to resign and you couldn’t save them, you have a plan to extract the knowledge you need and hopefully backfill the position internally.
The only constant in business these days is change so ensure that you continually analyze your turnover and the reasons for, keep communication channels open with your employees, understand their changing needs and identify opportunities for retention along the journey.
For more research and statistics about the current state of HR, click here.