It’s never been more difficult to find the right people to take your business to the next level. The unemployment rate in the USA was just 3.5% in late 2022, a record low that shows just how saturated the market is. This means that the hiring market is incredibly competitive, and with over 75% of companies reporting difficulties in finding qualified talent, you have to be able to hold on to the people that you do have as best as you can.
In this article, we’re going to explore a few topics surrounding employee retention to understand why people leave, what the cost of employee churn is, and then 18 practical tips to increase your retention.
Why Do Employees Choose To Leave Their Job?
Employees may choose to leave their jobs for a myriad of different reasons. The obvious one is when they feel like they’re not being paid enough, and they believe they can do better elsewhere. However, there are also several indirect reasons that can push an employee to leave the company. For example, if an employee doesn’t get the recognition they think they deserve for their accomplishments, it can take a severe toll on their work happiness and fulfillment.
Another potential reason could be that there aren’t suitable growth and development opportunities to keep them engaged and involved in what they’re doing. In some cases, people might not have enough control over their day-to-day actions, or information about where the company is heading, leaving them feeling stuck and underutilized.
To quantify these reasons, a 2022 Pew Research survey shows that 63% of job-leavers reported being underpaid, 63% reported being unappreciated, and 57% felt disrespected at work. The problem is well understood, but what does it cost you when you get it wrong?
What Does High Employee Turnover Cost You?
High employee turnover can dramatically slow company growth because of the interruptions to normal work processes and workflows, as you must constantly rehire and retrain to fill gaps. The loss of revenue without a productive employee in place is compounded by the increased costs in terms of advertising and recruiting, as well as the reputational damage that is suffered when you have a high employee churn rate.
These costs are serious, and that’s why it is so important to focus on employee retention if you want to ensure robust and long-lasting success. With this in mind, let’s now look at 18 ways to increase employee retention.
18 Ways to Increase Your Employee Retention
1. Share information proactively
As mentioned above, one of the most common reasons for people leaving is when they feel like they’re out of the loop and not involved in key decision-making. By sharing information about your mission, values, performance metrics, and strategic planning – you allow employees to invest in where your company is going and they’re much more likely to remain loyal as a result.
2. Schedule one-on-one meetings
So much of retention comes down to communication and that’s where regular one-on-one meetings can be so powerful. By giving employees a chance to engage meaningfully with their bosses, you can identify potential problems early and rectify them thanks to open two-way communication. It’s a great way to have your finger on the pulse and to encourage open-minded communication channels at all times.
3. Delegate responsibility
As humans, we often feel the most meaning and fulfillment when we take on responsibility. As a company, you should strive to delegate responsibility to your employees so that they have the autonomy to make their own decisions. This also has to come with a willingness to accept failure as people learn from their mistakes, but in the long run – it is the secret to loyal employees that want to stick around.
4. Show respect
This seems like an obvious one, and it is, but showing respect to your employees is an absolute non-negotiable. See them as humans, not just as workers, and demonstrate that you not only care about their interests but that you actually respect their skills and experience. It will go a long way to maintaining their trust.
5. Share revenue
Another great way to retain top talent is to share a portion of the company’s revenue with employees. By aligning incentives in this way, employees have the opportunity to control a portion of their compensation which can be directly tied to their efforts. The details here will depend on your circumstances but what cannot be denied is the power of financial incentives to decrease employee turnover.
6. Make time for relaxation
Too often, companies will lose top talent because they work them too hard and they burn out. As a company, you should be creating an environment with natural relaxation time that can help with both mental and physical health. Healthier employees are going to stick around longer and are actually going to be more productive over the long haul.
7. Create an engaging onboarding experience
An employee’s first impression of their new job is the onboarding experience and if this is not carefully curated then you’re missing a big opportunity. Focus on creating an engaging onboarding experience that demonstrates the type of working culture within your organization and you’re much more likely to capitalize on early enthusiasm and momentum. Research shows that 82% of new hires will stay if they go through a positive onboarding experience.
8. Pair employees with a mentor
Navigating a company can be challenging, especially for younger employees who are still gaining experience. In these cases, it can be a good idea to pair people up with mentors who can guide mentees along the path and be a sounding board whenever roadblocks are encountered. A little bit of social accountability and the sense that someone has your back goes a long way to ensuring higher levels of loyalty.
9. Schedule regular performance reviews
It’s important to give employees constant feedback about how they are performing because it makes it very clear where they stand. Regardless of whether it is positive or negative, performance reviews are crucial milestones that can help to ground an employee and give them a sense of how their career is developing.
10. Show your appreciation for your employees
We all want to receive appreciation for what we do because it validates our efforts and encourages us to keep going. Make this overt within your organization both in verbal form and through the way you reward your staff and you’ll see that employee retention improves drastically. A few kind words and genuine acknowledgment of hard work goes a long way.
11. Encourage work-life balance
Your employees are more than just workers and so you should always be looking to encourage work-life balance for healthier and happier team members. This comes down to creating a culture that celebrates this balance as a strength, making it easier for employees to see themselves staying for a long time.
12. Offer professional development opportunities
Every employee wants their career to grow and evolve, so by offering different types of professional development opportunities, you can help someone achieve that growth within your company – without having to go elsewhere. This can be in terms of training, conferences, job transfers, sabbaticals, or a range of other practical gestures that show that you want people to keep growing and increasing their skills.
13. Schedule regular team-building activities
While they are somewhat cliché in modern working culture, team-building is still an important part of retaining your employees. We are social creatures at heart and building bonds with the people that we work with is a significant factor that keeps us at our job for longer. Find the ways that are best suited to your company culture and make it a regular occurrence so that you’re constantly investing in team cohesion and morale.
14. Offer additional perks
You can always improve employee retention by adding perks that go beyond standard compensation. This could be free food in the office, complimentary childcare, generous maternity and paternity leave, flexible working conditions, or a variety of other things. Each of these makes the deal a tiny bit sweeter and increases employee loyalty as a result.
15. Offer a comprehensive wellness program
Building on the point above, wellness is becoming a more and more important part of the conversation when it comes to working culture today. You can go a long way by implementing a well-rounded wellness program that helps employees take care of their mental, physical, and emotional health – thus allowing them to manage the stresses and anxiety of day-to-day life. This has a direct impact on how they perceive their job and therefore can be very powerful in encouraging them to stay.
16. Allow flexible work arrangements
The COVID-19 pandemic has certainly opened the door wide open for remote working and other flexible working arrangements, and this is not something that can be ignored. By allowing for a level of flexibility for your employees, you enable a healthier work-life balance that can improve productivity and loyalty. NorthOne’s research suggests that 44% of companies are making serious allowances for remote work and that number is only increasing from here. It comes with its challenges of course, but the pros far outweigh the cons if you do it thoughtfully and intentionally.
17. Focus on effective change management
Whenever you change something within an organization, it can be a shock to those who are used to the way that things used to be done. By focusing on effective change management and open communication about why things are changing, you can ease these concerns and help employees adapt effectively. This translates into lower churn as a result.
18. Acknowledge key milestones
As humans, we tend to compartmentalize our lives into chunks and with each new chapter we tend to look back on where we’ve come from and look forward to where we’re going. As a company, you can be intentional about acknowledging key milestones both in someone’s professional and personal life, and this can be a very thoughtful way to celebrate their growth. A simple gesture on a 5th work anniversary, for example, increases the likelihood that they’ll stay longer because they see that you care.
By utilizing a combination of these factors you can dramatically improve your employee retention and set your company up for long-term success. And in today’s employment landscape, it’s more important than ever.
How Do You Know If an Employee Wants to Leave?
All of the points mentioned above can be very helpful for putting in place long-term, systemic improvements that improve employee retention, but what do you do in the short term? The only way to get ahead of an employee leaving is to identify the warning signs early so that you can attempt to uncover what is causing the problem and fix it proactively.
Here’s a quick checklist of clues that suggest that an employee might Want to leave your company.
- They are missing meetings for unclear reasons.
- Their productivity is declining.
- They are reluctant to commit to long-term projects.
- They are steadily becoming quieter and more reserved.
- They are losing interest in advancing their career.
- They are losing interest in pleasing their boss.
- They are actively avoiding social interaction with management.
- They are performing the minimum amount of work possible to get by.
- They are reluctant to participate in training and development at your company.
None of these on their own are conclusive evidence, but they should be taken as red flags that suggest that something is wrong. If you see these in one of your employees, open up communication to understand what’s going on so that you can see if there’s anything you can do to allay their concerns and keep them at the company.
What Do You Do When People Resign?
Even if you implement everything above, you’re never going to have a perfect record. There are always going to be people that resign and so the best that you can do is to use those moments as an opportunity to get feedback that can help with the rest of your retention. Be sure to have an exit interview where you find out what went wrong and try to get to the bottom of why that person is leaving. This feedback is crucial to identifying the specific weak points within your company culture and working environment so that you can make improvements. But hopefully, if you follow the advice above, employee exits will be as infrequent as possible.
If you’re looking for assistance in Education and Technology hiring, recruiting, and retention, be sure to get in touch with us here at The Renaissance Network. We’ve had a lot of success with our clients implementing the tips above and we can bring that experience to your unique circumstances. We’d love to meet you and see how we can help.