20 Effective Employee Retention Strategies Your Company Should Have
Hiring new employees can be an expensive process. Not only do you have to pay each new employee a salary, but you’ll also have to pay for additional costs, such as healthcare insurance, taxes, and infrastructure costs (such as the cost to give the new employee their own desk and equipment). There’s not much you can do about these costs if you need additional employees. The problem comes when you’re having to replace employees who have left.
Replacing employees who leave your company results in an inefficient use of money. Don’t make the mistake of assuming that replacing one employee with another won’t have a big impact on your budget. The hiring process itself requires time and money. It will take a lot of time to go through countless resumes, schedule and hold phone interviews, and to perform one-on-one interviews. More money will be spent on advertising the position, recruiter commissions, referral bonuses, signing bonuses, relocation costs, onboarding and training costs, and more.
In the end, the only sure way to cope with the costs of replacing employees is to improve your employee retention. After all, if your employees don’t leave, then you don’t have to spend an unnecessary amount of time and money trying to replace them. We’ve put together 20 employee retention strategies for your company to implement:
1. Offer Competitive Salaries and Benefits
The main reason why employees leave their jobs is because they’ve received a better offer from another company. If you’re not offering salaries and benefits that are in line with what’s being offered throughout your industry, then you are much more likely to lose your employees at some point. According to a survey conducted by Glassdoor, it’s estimated that roughly 45 percent of employees who quit their jobs do so because of salary. Trying to save money by offering less competitive salaries and benefits to job candidates can backfire in the long term. Even if they take your offer, they will be more likely to look for greener pastures.
2. Hire the Right Employee
Many companies make the mistake of hiring new employees based only on skills and experience. Their ability to do the job is obviously important, but you also need to make sure you’re hiring the right type of employee. Meaning, will they fit with your company culture? If they’re a bad fit culture-wise, they may leave as a result. If they have a habit of jumping from one company to another, then you can expect them to leave your company after a short period of time as well. Employees with a history of quitting aren’t good long-term investments.
3. Create a Mindset for Success with an Onboarding Process
Every new employee should be put through an onboarding and orientation process that not only teaches them about the job (such as how to do it and what their responsibilities are), but that also explains your company culture and how they can contribute to it. Without such an onboarding process, new employees will often become stressed out and frustrated due to a lack of guidance and direction, making it difficult to fit in. If they’re off to a rocky start, they’ll have a poor first impression of your company that will linger throughout their time there.
4. Cultivate A Culture of Servant Leadership
Bosses are people who just want to order their subordinates around. Leaders are people who want to see their teams succeed and will help them do so. There’s a huge difference between the two and it’s incredibly important that your managers, as well as your CEO, understand this difference. Your employees will want to work hard if they are being led by someone who inspires confidence and who encourages them to succeed. They will feel restricted and looked down upon if they are being bossed around. Employees whose managers boss them around won’t want to stick around for very long and will look for new opportunities elsewhere.
5. Teach Your Managers How To Motivate People
Emphasizing the difference between leaders and bosses is one thing, but actually making sure that your managers are leading their teams and not just bossing them around is another. It’s a widely held belief that when an employee leaves, they’re not leaving the company, they’re leaving their manager. When employees have a good relationship with their managers, they are much more likely to stay.
To cultivate healthy relationships between your employees and their managers, train your managers on how to encourage and motivate different types of employees, as well as in areas of conflict management, crisis management, stress management, and more. Keep an eye out for managers who seem to lose team members on a regular basis. If employees from one team are consistently leaving, there’s a good chance it’s because of an issue with their manager.
6. Keep Employees Engaged
Employees who are not fully engaged with their work are often distracted. If they are distracted, it means that they are not motivated. When employees are unmotivated, it means that they don’t care about their work and will feel less fulfilled in their job. All of this will make it easier for them to leave their job if another opportunity comes along.
When an employee is engaged with what they are doing, they’ll be more hesitant about leaving. There are many ways that you can keep your employees engaged. For example, you can implement cross-training programs to improve their skill sets and opportunities within the company. You can also create a leadership ladder that gives employees the motivation to work hard towards getting a promotion. This can help prevent employees from feeling like they are in a dead-end job.
7. Foster Teamwork
A healthy work environment is one where employees work together and get along with each other. Encourage strong work relationships between your employees so that they actually feel like a part of your company. If everyone feels isolated from each other, they won’t feel like they are a part of anything. They’ll feel like they’re going to work with complete strangers everyday. By fostering teamwork, you will encourage them to get to know each other and to build relationships. When an employee has a strong relationship with their coworkers, they won’t want to leave such a healthy work environment.
8. Designate Mentors
A mentorship program is a great way to improve the office environment, help employees feel like they belong to a community, and help nurture the growth of your employees. Keep an eye out for employees who have potential. These are the employees that you do not want to lose. Set up mentors for these employees to help them realize that potential. Not only will you keep them engaged, but they’re more likely to develop a sense of loyalty to your company as a result of your efforts to help them grow.
9. Acknowledge Milestones
To help keep your employees motivated, make sure that your managers acknowledge specific milestones that they meet. Even a simple congratulatory message or thank you note can motivate your employees and inspire them to continue their hard work. By acknowledging milestones, you also indicate to your employees that their work is important to your company. When they feel like they play an important role in your company’s success, they’ll feel more emotionally attached, which can prevent them from leaving.
10. Recognize their Efforts
If an employee works hard and goes beyond what is expected of them, they will want to be recognized for their effort. If they’re not, they’ll feel like they’re undervalued and underappreciated. They will lose their motivation to be productive and will revert back to doing only what’s expected of them. After all, what’s the point in working hard if nobody notices? And when this occurs, employees won’t think twice about leaving your company for greener pastures.
To counter this possibility, make sure to recognize the efforts of your employees by rewarding them, such as by providing an extra day of paid leave or by giving them tickets to an event around town, to name just a couple of examples.
11. Implement a Rewards System
Gifts to high performing employees can help them feel more appreciated; however, you should consider implementing an established rewards system as well. This will give all of your employees the incentive to work hard and be productive. Knowing that they will be rewarded if they meet certain goals helps keep employees motivated and engaged. It can also help elevate the general spirit of your office environment.
12. Provide Adequate Rest Periods
All the encouragement and rewards in the world won’t do much good if you’re overworking your employees. If you overwork them, they will become stressed out. Not only can this affect the quality of their work, it can affect their social lives as well. The more stressed out they are, the more appealing another job offer might become. Make sure that you don’t give your employees more than they can handle and allow them adequate rest periods. This way, they won't burn out, especially after they have completed a particularly difficult task or project.
13. Invest in their Professional Development
Don’t just hire employees, invest in them. By investing in their professional development, you’re essentially investing in your company. Think about it -- employees who continue to develop will be able to do more advanced tasks and jobs at your company, which means you won’t have to take on new employees. Instead, you can just promote internally. Employees will take note that you’re investing in their future too and will be more likely to stick around.
14. Provide Training
Besides providing initial training when onboarding your employees, consider providing additional training opportunities whenever possible. Such opportunities will allow your employees to expand their knowledge and skills. Then they’re not limited to their existing position. If they take advantage of the training opportunities you provide, they can be promoted to higher positions within your company or higher levels of responsibilities if promotions are not available. Some companies will even reimburse their employees for continuing education training.
15. Have Them Participate in Conferences
Employees can learn a lot and make valuable connections that can benefit your company at industry events and conferences. Offer to pay for any required fees and for the cost of travel so that your employees can attend these events and conferences if they are available in your industry or area of specialty. If they aren’t, look for conferences that focus on important skills like sales, customer service or leadership.
16. Maintain Open Lines Of Communication
It’s essential that your employees feel like they can speak to leadership about anything that’s on their minds. Any input that they have could benefit your company, even if it’s a feeling of frustration with their job. If they’re feeling frustrated, you’ll want to know. Not only can you figure out a way to ease their frustration and prevent them from leaving, but you’ll have a greater chance of avoiding similar issues with other employees in the future. In order for this to happen, you need to maintain open lines of communication. Many employees are hesitant to approach their managers even if there’s an open-door policy. Make sure that your leadership encourages employees to communicate clearly and honestly without repercussions.
17. Act on Feedback
Employee feedback is critical to your ability to retain your employees. The more you know about your employee experience, the more you can work to improve it. Encouraging open communication can certainly help you obtain valuable feedback about issues in your workplace; however, you should actively encourage feedback in order to receive it. Even minor criticism about the workplace or about your processes can help you make improvements. Not only does acting on feedback helps improve your place of employment, but employees will see that you’re making an effort to improve their work experience, which goes a long way in helping to build long-lasting relationships.
18. Review Your Retention Rates
To understand how well you're doing at retaining your employees, monitor your retention numbers. If you’re losing more and more employees over time, then you know you have an issue with employee retention that needs to be addressed. This is especially true if the retention numbers are bad under certain managers. It may mean that these managers need training in how to lead their teams more effectively.
19. Encourage Work-Life Balance
Although you want your employees to work hard, you don’t want them to have to sacrifice their social lives in order to do so. A lack of work-life balance can be very unhealthy and can result in unhappy employees. For example, if an employee is constantly having to put in extra hours, it means they are spending less time at home with their family and/or friends. Even if it doesn’t cause strain in their relationships (which it very well could), it can cause them to become unhappy. When an employee is unhappy, they’re more likely to leave.
You can encourage a healthier work-life balance by establishing regular work hours, implementing policies for working on the weekend, and by offering work-from-home options. You should also make sure to monitor how hard your employees are working so that you can give those employees much-needed breaks.
20. Create Flexible Working Arrangements
Some companies don’t offer their employees flexible schedules. This means that they have to schedule their personal lives around their work schedules, which can be a real challenge to those who have family responsibilities outside of work. Be flexible if an employee asks if they can change their schedule. For example, maybe working on the weekends works better for them instead of the traditional weekday work schedule. Or maybe they want to align their work schedule with that of their significant other so that they can spend more time with them. Some employees may be able to do their jobs from home -- giving them the chance to work part of the workweek remotely can be seen as a huge perk to these employees.
Promote A Company Reputation Your Employees Will Be Proud To Belong To
Retaining your employees is critical to your business. In order to improve employee retention, think of your relationship with your employees as being a two-way relationship. They don’t just work for you, you also work for them. Provide them with a positive work environment that encourages growth within the company and they will be more likely to stick around. Finally, make sure that your company is one that they can be proud to work for. And a company that employees can be proud of is one that takes care of its employees.
This blog post is intended for informational purposes only and does not constitute legal advice. No attorney-client relationship is created between the author and reader of this blog post, and its content should not be relied upon as legal advice. Readers are urged to consult legal counsel when seeking legal advice.