Hiring qualified employees are one of the best things you can do for your business, and getting them to stick around is even more important.
High turnover rates are both costly and time-consuming. In fact, studies have shown that the cost of replacing a worker can add up to 20 percent of an employee's salary. For middle and upper management, the cost can be even higher. So what retention strategies can you use to keep key employees from moving on?
Why It's Important
Of course, a high turnover rate will cost you financially. But that's not the end of it. Losing staff members can have other long-term ramifications, especially if they were on the team for a long time beforehand.
Here are a few examples:
- Company morale—The remaining employees may wonder if there was a major underlying issue that caused the worker to leave their position
- Workflow disruption—Remaining team members will have to scramble to fill the gap
- Productivity loss—New hires take time to get up to speed
In short, retaining employees is critical to the success of your business. What's more, when you're able to maintain a low turnover rate, you'll be able to attract more experienced workers who are willing to do their part.
10 Tips on Retaining Talented Employees
1. Recruit Wisely
The vetting process is one of the most important factors in employee retention. Don't be tempted to offer an interview to every candidate who applies. Instead, look for applicants with solid work histories and skills that will benefit your company.
Keep an eye out for potential red flags as well. If an applicant has had a number of jobs in a short period of time, there's a chance they might not be interested in a long-term relationship with the company.
2. Start At The Top
When it comes to retaining talent, leading by example is one of the best things you can do. Employees tend to feel more engaged with the work environment when their employers and supervisors take a hands-on approach. Conversely, if the managers are doing a poor job, workers are more likely to leave their positions.
When hiring, be as transparent as possible. Make sure that the employee knows what's expected of them, and follow up to ensure that they know whether their performance is acceptable.
Also, let them know what they can expect in terms of earning potential. Give them a solid time frame regarding pay raises, and make it clear that they'll be eligible for advancement as long as they follow the criteria you've laid out for them.
3. Showcase Their Talents
If you want to learn how to retain key employees, give them a chance to shine. When people are allowed to use their specific skill sets, they're far more likely to succeed—and will be much happier as a result.
Don't be afraid to give your employees duties that go above and beyond their original job description if it gives them a chance to show off their talents. For example, a retail manager with a background in graphic design might be interested in making up the signs for upcoming sales, holiday hours, and the like.
4. Let Them Speak
Does your company have a platform that allows staff members to share their feedback? If not, now would be the time to implement one. When employees feel that their voices are being heard within the organization, they're much less likely to vent their frustration to outside sources.
Let your workers voice criticism about any aspects of the job that aren't working for them and share ideas for improvement. This can be a great stress reliever and bonding exercise, making the staff feel like members of a family.
5. Take Time To Train
Often, effective training serves as the key difference between retaining employees and losing them to another company. If a new hire seems to be struggling, ask yourself if the problem lies with the worker, or if the training system itself might have fundamental flaws. If it's the latter, you'll need to rectify the problem before the worker moves on to a job that allows them to flourish.
6. Provide Growth Opportunities
It takes more than pay raises for employees to feel as if they're moving forward with a company. A motivated employee will want to learn new skills as they go along.
Encourage workers to attend seminars or webinars that relate to your business. Regularly challenge them with new tasks that will help them build on their knowledge. In their performance reviews, ask what you can do to make them feel more engaged with the business. These touches will help to prevent your employees from feeling stuck in place.
7. Provide Incentives
Employees are much more likely to stay with companies that make them feel appreciated. Verbal thanks are a necessary step, but why not take it a step further by offering bonuses and gifts from time to time?
End-of-year bonuses are common, but you might also consider implementing an attendance bonus program that rewards workers who show up regularly. If a worker knows that they'll miss out on a monetary reward when they miss a shift, they might be willing to make more of an effort.
Similarly, think about distributing a round of gift certificates on certain holidays. For a small business, this is especially important, as it makes workers feel valued and less like cogs in the machine.
8. Offer Flexible Work
Flexible work arrangements are especially appealing to employees who want the opportunity to work from home. Assuming you have the technological capabilities to allow this, it can be a solid recruiting tool.
There's no need to offer full-time remote work to every employee. A flexible work schedule can mean showing up on-site just a few days a week and working from home the rest of the time. Depending on the nature of your business, you might allow workers to work toward a weekly, monthly, or annual hourly quota with no set schedule.
9. Don't Overlook Benefits
Employee benefits should go hand-in-hand with competitive wages. Health and dental insurance, paid time off, and 401(k) plans are standard, but you might be able to take these a step further. Think about what your company has to offer that might be difficult to find elsewhere, and tailor your benefits package accordingly.
10. Pay Attention To Data
The exit interview is not the time to ask what went wrong. Take advantage of current technology to head off potential problems. If retaining key employees is your goal, then you should use whatever tools you have available in order to stay ahead.
Take a look at your payroll history to determine what time of year employees are most likely to leave. Is it during the first quarter after the holidays? Or do they stick it out until they receive a lucrative end-of-season bonus, and quit shortly thereafter? If you find any patterns, think about what steps you might take to circumvent them.
Once you've learned how to retain key employees, you can focus on recruiting more of them to join your team. For more ideas and inspiration, our e marketing website blog has quite a few human resources articles relating to employee retention, workplace relations, and more.