Finding new employees can be tough, no matter what industry you work in. We surely shouldn’t forget that Millennials became the largest generation in the labor force. This generation (born between 1980 and 2000) is prone to more frequent job changes compared with previous generations. That is why retaining quality employees is more important than ever, and using effective employee retention strategies is key to reducing employee turnover.
Retaining employees is one of the greatest challenges managers and HR departments face today, and it can be very frustrating. Therefore, they need to create a positive work environment that supports and encourages employees.
Why it’s important to reduce employee turnover
The main goal of employee retention strategies is to reduce the costs of the high turnover rate in companies. And when we say costs, we don’t mean only financial costs, but also time and productivity costs.
These costs can be divided into two groups:
- Direct costs: When an employee leaves the company, it costs a company to find a new employee (e.g. advertising costs for an ad for a specific position; hours spent in the process of selection and interviewing), temporary replacement until finding a new employee (e.g. overtime of other workers), training costs (e.g. time for people to train new employees; training materials or educations)
- Indirect costs: These costs are harder to track, but they can have just as much of an impact on your company. Losing an employee can negatively affect the morale and productivity of the remaining workers. If other employees need to work overtime, they can be under stress and pressure. Also, your company can face the costs of opportunities – the costs of business lost because you didn't have the people resources to do all the work. In the end, a high turnover rate can have a negative impact on your business image and reputation.
Proven employee retention strategies you can implement fast
To retain your employees and reduce turnover, you need to go beyond work perks. These perks, like happy Fridays, free weekday lunches, gym reimbursement, and similar, can work to attract new employees. However, they are not enough to keep them for a long time.
You need to establish some ground rules and strategies, and retention efforts should start on the first working day of an employee. Be persistent and constant with these strategies to have long-term effects.
Here are some tried-and-true employee retention strategies:
1. Ask for and give feedback
Constructive feedback can be beneficial for both sides – employee and employer.
With timely and regular feedback from the supervisor, the employee receives input about his work. It’s important to set clear expectations and be honest about what you expect from your employees. This allows them to adapt, learn and develop properly and to be more efficient.
On the other side, it’s also important to encourage open dialogue and listen to all the feedback your employees give you. Act on what they are saying and make their vote count.
Give them a platform where they can share their knowledge, thoughts, and ideas about different things. That way, they will feel important and valued, and then it’s more likely they’ll stay.
2. Celebrate small (and big) wins
People love to feel a sense of meaning; they need encouragement and recognition. Especially when they make an effort and finish some project with great results or before the deadline. The lack of recognition and praise can be demotivating. So show them you see and appreciate their hard work.
Even some private achievements, like graduation or additional education, can be a great occasion to give praise. That way, your employees will feel you value them as a person and not just as a workforce.
Feeling valued at work is linked to better physical and mental health, greater job satisfaction, and motivation. And in such a positive environment, everyone will be comfortable working.
3. Give your employees opportunities to grow
Every employee expects to develop and professionally grow at a company. Give them a chance to learn and support them with talent and career development programs.
It’s not enough to give them a new title – you need to put more challenging tasks and more responsibilities in front of them. Also, you can include them in different training, seminars, and development projects, where they can learn from experts outside the company.
If your employees feel stuck or stagnant, they are more likely to look for a new employer who will give them a chance to further develop and improve their knowledge and skills.
4. Encourage a healthy work-life balance
This is one of the most important employee retention strategies. If the work-life balance is unhealthy in a company, there is a big chance that employees will leave that company. Dual-side pressure (from work and home) can be exhausting and lead to burnout.
It’s crucial to set boundaries between work and home hours. So, don’t ask employees to be available 24 hours a day and encourage them to take small breaks when they feel exhausted during work – these breaks can help them recharge their batteries.
But it’s not all about working hours. Ask yourself if your employees often feel stressed because of deadlines and tasks. Too much stress and pressure can lead to work fatigue, so consider how you can reduce pressure and support their well-being.
Even small things can make a big difference. For example, reducing all unnecessary distractions can boost productivity so your employees will finish all their tasks on time and won't be under pressure to meet deadlines.
5. Give them competitive pay and benefits
It’s a well-known fact that people want to be compensated for their work. Low wages and minimal benefits are one of the common reasons people decide to change companies.
Your wages should be competitive, so it’s important to do some market research and offer wages that are comparable to or better than the market value of a position. And it’s not just about salary – other benefits, raises, bonuses and awards can be a good motive for employees, especially top performers, to stay in your company.
Have in mind that financial compensation is not the most important motivator for people to stay in their current work, but it’s one of the ways to show them that you see and appreciate their work.
Some of these employee retention strategies can be easily implemented in every company. For example, you just need to use words to give feedback and celebrate wins. Others may require smaller or larger investments, but in the long run, it will certainly pay off.