5 Tips to Improve Employee Retention

Employee retention is often one of the biggest struggles organizations face – and for good reason. The upfront costs to find, hire, and train a new employee, plus the cost of a long recruitment cycle, can have a serious impact on your bottom line. Beyond the tangible costs, there is often a significant cost to your team’s shared knowledge, skills, and morale when a high-performing employee departs. Note that this article focuses on employee retention for those employees you want to hang on to – if you couldn’t care less if an employee leaves then you should do everyone a favour and let them go as soon as possible. Employee turnover tends to be viewed as one of those problems that businesses can’t do anything about – after all, the employee is choosing to leave for their personal reasons, so there isn’t anything we can do about it, right? Not quite. In fact, there is a wide variety of strategies employers can use to improve their employee retention. In this article we will be covering five of them: fostering a positive work environment, investing in employee development, staying competitive, providing advancement opportunities, and listening (and acting on!) feedback.

#1. Foster a Positive Work Environment

Let’s get one thing out of the way upfront – a positive work environment does not mean unlimited office snacks and a slide. Some employees might consider those fun perks, but no one is stays in a job they hate because the chips are really good. A truly positive work environment means your employees don’t dread sitting down at their desks every morning because of the team they work with. Your team doesn’t have to think of themselves as a ‘family’ to achieve this, but they do have to feel comfortable voicing their opinion in meetings and brainstorming sessions. They have to know that their work is being noticed and appreciated, and they have to feel like they’re actively helping the company achieve their goals. Most importantly, they have to trust each other – including leadership. If you suspect there’s a problem with your team, Liane Davey has a fantastic quiz to help you diagnose what type of toxic team you may have. For the best results, have people across your team at different levels take the quiz and compare results and strategies to eliminate the toxicity. Open communication, employee recognition programs, and non-cheesy team-building activities and events can all be strategies to consider when trying to improve your work environment. If the problem is toxic leadership (think a manager who belittles, screams, or uses sarcasm as a weapon), decide if there are solutions to address these problems, or consider replacing them – after all, it may be better to replace one bad manager then continuously lose employees because of them.

 

 

#2. Invest in Employee Development

Your employees are not static beings who will be happy doing the exact same job for the rest of their lives – and you shouldn’t want them to! Today’s workforce expects that they will have the opportunity to learn and grow on the job and if your organization isn’t providing that, you’re missing out on huge opportunities to not only retain your employees, but also improve productivity, efficiency, and speed up growth. While not all employees may represent unlimited potential, everyone should be given the chance to improve their skills and develop their work-related talents. People might not stay for snacks but they often will for paid training programs, mentorship opportunities, tuition reimbursement, and re-training as processes and equipment evolve. Give your employees a real, achievable chance to impress you with their willingness to learn by paying for their time, materials, and education costs – we can almost guarantee it will be cheaper than replacing them over and over again. Plus you will have the added benefit of a team that continues to get smarter and more skilled!

 

 

#3. Provide Opportunities for Advancement

This tip works for the same reason as the tip above, but in this case, you’re taking it a step further by tying titles and fair pay to professional development. The key to making this tip effective for your team is to ensure that the opportunities you’re providing are actually desirable to your employees. The cornerstone to this is a personalized, clear, achievable career path for each member of your team. This path should be initially discussed during the hiring process, and then created, clarified, and mapped out within the first 3 months of the employee’s time with your organization. The path needs to have learning plans, milestones, and steps assigned to it and needs to be revisited during every quarterly and annual review (or if you subscribe to weekly check-ins, it should be revisited monthly). You can learn more about career paths, and how to develop them in this great blog by Ten Thousand Coffees. An important aspect of this tip is commitment and buy-in from stakeholders to promote from within whenever possible and ensure the professional development opportunities you offer also include leadership training. 

  

 

 

#4. Offer Competitive Compensation

Every year, as the cost of living increases, your team is going to need more money to meet those costs. As your team gets smarter and more productive, or moves along their career paths, they’re going to expect fair compensation. One of the biggest problems many organizations face is that their budget for hiring is significantly larger than their retention budget, which means that the fastest route to a pay raise for many employees is to switch companies, rather than wait for a promotion within their current role. If your employee is deciding between a 20% increase in pay at a new job or a 2% increase in pay (that comes with additional responsibilities) in their current role, it’s not a hard choice for them to make, especially if there are no other additional benefits like the ones we’ve outlined in this article. When it comes to fair compensation, remember that, when you replace that employee, you’re likely going to have to pay the new hire 20% more anyway, as they know that is the going compensation rate for that role. Or you may have to settle for a candidate with less experience, skill, or key qualifications at the same pay rate. Add on the cost of training, plus the lost cost of all your departing employee’s knowledge and skill in your organization, and the retention math starts to make a lot more sense. Beyond a competitive salary and fair-market-rate yearly raises, healthy bonus structures and a comprehensive benefits package can help sweeten the pot when it comes to retaining high-performing employees.

 

 

 

#5. Listen to Employee Feedback and Act On It

Everyone has an opinion, and when it comes to your organization, it can often feel like the only opinions that matter are those of your customers, stakeholders, or leadership team. While this might help you filter out unwanted opinions, it overlooks some of the most valuable feedback you could hope to receive – that of your team. According to a recent report by Perceptyx, organizations that implement employee feedback are “4x more likely to retain talent, 6x more likely to exceed their financial targets, and 9x more likely to achieve high levels of customer satisfaction.” There are several different tools and processes for gathering feedback including surveys (weekly, monthly, or quarterly), one-on-one meetings, reviews, or check-ins, and digital or physical suggestion boxes. But it’s not enough to simply take in feedback – the real power move for both employee retention and overall organizational success is implementing changes based on it.

 

 

Employee Retention Takeaways

In summary, the five keys to improving employee retention in your organization are fostering a positive work environment, investing in employee development, providing ongoing opportunities for advancement, offering competitive compensation, and ensuring you’re collecting and acting on employee feedback. Implementing all these strategies at once may feel overwhelming or downright impossible. Those that require a significant budget or investment may be financially out of reach at this moment. However many of these tips are easy to introduce into any organization on a small scale and grow as fast as your organization can support. For example, removing toxicity in a team or manager can be as straightforward as opening lines of communication and addressing the elephant in the room. Small steps can have a huge impact on your employee retention, and the sooner you start, the less fantastic employees you’re likely to lose.

 

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