Improving employee retention is important in every industry, but it’s rarely an easy matter, especially given the heavy impact of factors such as industry competition, changing demands of customers and clients, economic instability, and advancing technology.
In economically uncertain times, budgetary concerns and workforce morale come into play too. Unlikely as it may seem, economic instability can actually result in more people voluntarily leaving their jobs, particularly in manager-level positions.
This kind of attrition has a significant impact on businesses, and it’s important to take steps to both improve employee retention, and minimise the impact of losing key staff members in the event that it does occur.
So what can be done by businesses to improve staff retention levels?
Why do People Leave?
First, it’s important to understand exactly why employees leave their jobs. For most people, reasons for leaving fall into one of three main areas:
- Lack of opportunities for growth or advancement — for example, if someone is continually passed over for a promotion for which they are qualified, or someone in a management position feels that they are not getting adequate leadership development opportunities.
- Inadequate compensation — either in comparison to other people in the same field, or in comparison to others in the company at the same level of management.
- Feeling unappreciated — people who feel that their skills, contributions, and opinions aren’t being recognised and appreciated by people they work with or for.
A Dual Approach to Improving Employee Retention
Given those three main reasons people cite for leaving their jobs, it’s obvious that while there’s no quick solution to reducing employee turnover, the types of things that businesses need to be doing in order to retain their staff are very clear.
First, is ensuring that key employees get opportunities for professional growth — management skills training for management staff, for example — and second, providing staff with incentives that increase their loyalty and strengthen their ties to the company.
There are also other key elements to consider:
Providing competitive compensation and benefits
- Providing compensation and benefits packages that are appropriate for an employee’s level of skill and experience, and the work they do
- Providing compensation that’s in line with market value
- Providing a competitive benefits package that offers perks that employees value
Providing compensation and benefits that make a company competitive in the industry means making room in what might be a tight budget — but considering that it typically costs more to hire and train new employees than it does to increase compensation for the ones you already have, in the long run this saves money.
Recognising employee contributions
- Establish incentive and initiative programmes that recognise and reward high-performing employees
- Encourage open communication, communicate goals, and share results
Inspiring and encouraging employees is key not only to increasing employee retention, but also employee productivity. A particular advantage of this approach is that improving company culture costs nothing—it’s effective in any economy.
Providing development opportunities
- Develop a company culture in which learning is encouraged and promoted
- Make external as well as internal training opportunities available
- Promote cross-training when it’s appropriate
Again, providing development opportunities don’t just improve staff retention, it improves skill and productivity too. These are win-win strategies that help companies retain key staff members, and make employees better at their jobs.
Encouraging a healthy work life balance
- Develop a healthy and positive work environment
- Allow employees flexibility; for example, allow opportunities to work remotely, or work different hours when appropriate
- Be clear and realistic in terms of expectations about employee performance and workload
What makes an employee stay put?
What tactics do you use to retain your valuable employees?
Creative Commons image courtesy Hans Splinter.