Employee retention is the ability of an organisation to keep its employees and reduce turnover.
A 2015 publication by the Journal of Leadership, Accountability and Ethics cited a 2004 report by the Society for Human Resources Management that revealed that 75% of employees were actively looking for a different job. Note that this was a time when only 12% of the world population were internet users.
Fast forward to 2021 – millions of businesses are now online, and it’s become easier for talents to search for jobs.
In addition, the increase in the number of businesses launched yearly has caused organisations to now compete for the best talents. The competition is fierce and modern organisations often complain of a shortage of talents.
As a result, it has become vital for organisations to devise strategies to retain their best employees.
Importance of Employee Retention
Employee retention ensures greater productivity which results in increased revenue, improved employee engagement and satisfaction, and better teamwork. Some other business benefits include:
1. Reduction of turnover cost
Finding new competent employees is hectic and costly. While a position remains vacant, the organisation is forced to dedicate time and resources to attract top talent and then hire, onboard, and train them – a process that often results in loss of productivity and time.
It is unrealistic to expect new hires to be 100% productive. They would require some hand-holding while learning how things work in their new organisation until they can fully work independently. In fact, new hires are less than 50% productive in their first three months.
2. Prevent loss of expertise and valuable information
When employees leave an organisation, they take valuable information about the company, customers, and their own expertise with them. As a result, knowledge transfer and succession are hindered, which can sometimes trigger the exit of other workers.
3. Better customer service experience
A consumer’s impression of your organisation from the initial interaction to post-sale support is referred to as customer experience. The longer an individual stays with your organisation, the more familiar they are with the organisation’s processes as it relates to the customer.
New employees may take longer to complete tasks, be less adept at problem-solving, and be more prone to customer service errors, all of which can negatively impact the customer experience.
Employee Retention Strategies
Before deciding on the best strategies to try, it’s important to understand why your employees stay. Collect regular feedback from employees and make the most of exit interviews to learn more about why some other employees leave.
The following are strategies you could employ to improve employee retention.
1. Good employer branding
Employee retention starts from when candidates apply for jobs in the organisation. Recruitment presents an opportunity to influence your future workers’ overall perception of your company and set the tone for the rest of their stay with you. This is where you can win early, so take full advantage of it by making the hiring and onboarding process as smooth, enjoyable and efficient as possible.
Showcasing current employees and celebrating their wins is a good way to position the organisation as an excellent workplace.
2. Communicate feedback efficiently
Constructive criticism is crucial for growth, so it must be delivered with the aim to improve. A negative comment made carelessly in a team meeting or performance review can dampen motivation in even the best employees. The sandwich method is a favourite when giving negative feedback – start with an appreciative comment regarding something they excel at, give the negative criticism, and end on a positive note. Doing this will make employees more receptive to criticism.
Consistent face-to-face meetings are a great way to provide your talent with constructive feedback and advice, pointing out areas where there can be improvements.
3. Offer learning and growth opportunities.
Constant professional development of the workforce is critical to the growth of the organisation. It is vital for employee engagement and one of the best ways to create and maintain a competitive edge in your industry.
Provide learning and growth opportunities to help employees continually upgrade their skills and advance toward their career goals while simultaneously allowing the company to broaden the capabilities of its staff.
The more engaged employees are, the more likely they are to stay with the company and keep their skills and expertise in-house.
4. Provide quality supervision
A 2019 study by DDI revealed that 57% of employees had left a job because of their manager. This shows that manager-employee relationships are critical to employee retention, and this goes beyond whether the manager is a nice person or not. Therefore, managers must develop their management and communication skills to improve the quality of supervision their direct reports receive.
5. Incorporate technology into work
Providing your staff with technological tools will help them do their work faster and more efficiently, preventing employees from burning out quickly.
In today’s world, there are several project management tools that can improve the overall employee experience.
In HR, the automation of administrative tasks such as leave management and payroll administration has become key in freeing up time for HR to do more. They will be able to focus on strategic objectives, such as improving employee engagement and experience. Essentially, they will be able to concentrate on what is truly important – the people.
6. Efficient change management
Let’s face it; change is constant regardless of the sector your business is in, and it can be tough to keep your staff informed and confident as these changes occur. With so many projects in the pipeline, you must deliberately have meetings to reassure your employees that you’re working hard to make the changes that will best position the company, and the employees by extension, for success. Make big announcements in group meetings or individually, and allow time for questions.
7. Employee compensation and rewards
In the past, organisations have used compensation to retain staff. However, this approach proves not enough as employees now want more than just a paycheck, but it’s still quite important and should be included in your retention strategy, amongst other plans.
It is crucial to pay your employees a salary equal to or above industry standard for similar jobs in the same geographical area. It would be best if you even threw in benefits that would be useful to them.
Also, consider instituting a reward system that awards good work.
Make it a habit to re-evaluate your employee retention efforts regularly to ensure they’re effective.