After you have hired an employee, only half the battle is won. Retaining your hard-won employees is a constant challenge, not a one-time win. Building long-term commitment and loyalty among employees is the key to keeping them on board for the long haul.
Fostering an engaging and dynamic company culture plays a large role in keeping employees happy, and ultimately can mean the difference between them staying or opting to leave. Small perks, competitive benefits and a quality work atmosphere can go a long way to keeping employees content in their employment. Competitive pay, performance bonuses, other financial rewards and promotion from within the company can also be strong incentives for attracting and retaining talent. Because employee turnover costs can be crippling for companies, it is necessary to thoroughly track and measure retention rates. If you don’t keep track of when and why people are leaving and make efforts to improve, your talent pool and overall company performance will suffer.
In a case study that documented the cost of employee turnover between 1992-2007, it was revealed that for all positions except for executives and physicians—jobs that require very specific skills—the typical (median) cost of turnover was 21 percent of an employee’s annual salary. With this in mind, figuring out early-on how to retain employees can save a company significant money.
Perks and Benefits
Providing minor perks to improve employees’ wellness and day-to-day lives, such as offering gym passes or childcare, is well worth the outlay. Such concepts can be low-cost in relation to the associated benefits. Your employees will be more happy and healthy, and less stress or health ailments generally result in less hindrances to productivity. While seemingly insignificant, small gestures often go a long way to creating a trusting environment between company and employee. If management makes it a priority to care about the details of its employees’ lives, those employees are likely to stay, rather than leave for a company offering better conditions.
According to Forbes’ Bill Conerly, companies should always be thinking about how to re-evaluate their current benefits package. “This isn’t to say that benefits need to be increased, but that the package should meet the needs of those employees most likely to leave the company,” he said. “All too often, very senior managers think about what is important to them, not the 30-somethings who are considering changing jobs.”
Millennial careers are more transient than any past generation – on average, jobs are changed every two years – so Conerly’s advice may become even more relevant as younger generations flood the talent pool.
The Financial Rewards of Hiring from Within
Employees generally want progression. Most do not want to remain in the same position for the duration of their career within a company. If employees believe there will not be an opportunity for promotion, they’ll often consider options for other career opportunities. An article in The Wall Street Journal (WSJ) claimed companies are advised to “give employees a clear path of advancement.” Without providing employees a vision of how you are planning their progression, the WSJ notes, “employees will become frustrated and may stop trying if they see no clear future for themselves at your company.”
Of course, financial incentives are a primary way to motivate employees to stay at a company. For example, management might consider offering stock options and other financial awards for employees who meet performance goals. These added financial incentives encourage employees to invest more in the long-term success of a company and also in their own financial well-being.
There are many factors that influence employee retention and turnover. Identifying the factors that are more influential for your company’s workforce, and what areas your company is able to address or improve, will guide your decisions on initiatives to improve employee retention. Working to recognize the strengths, weaknesses and opportunities of your organization’s culture and established policies will enable you to ensure employees are happy, engaged and fulfilled. This will ultimately improve retention and reduce turnover, while also improving business productivity and quality of life for all involved.