Employees are integral to a company’s success. Highly skilled and motivated talent can take a business far, but the days when employees spent the majority of their working lives at one company are over and have given way to a culture of job hopping.
This makes understanding how to leverage and retain your most skilled and talented employees a crucial process to ensuring your company’s long-term success. By retaining your best employees, you can improve client or customer satisfaction, product sales and maintain a positive working environment, while maintaining a motivated core staff base who buy into your corporate philosophy.
Getting to the heart of the issue
Although 70% of managers believe that pay is the main reason employees choose to leave their jobs, the truth is that 88% of employees leave for other reasons and understanding these motivations is key to employee retention. Due to this misconception, managers all too often respond to disruptive periods of high staff turnover simply by offering their star performers financial incentives. However, this approach is misled – it’s not just about money. Rather, it is vital to try to understand and anticipate the more nuanced reasons employees may have for wanting to leave.
There are various reasons why employees leave organisations, however they can almost all be attributed to a lack of personal fulfilment and satisfaction, rather than monetary motivations. Some employees may feel that they receive too little coaching or feedback on their work, leaving them feeling lost and unsure of their place in the organisation. This may quickly lead to feeling devalued and underappreciated. Another problem that employees may face is a perceived lack of opportunity for growth. If they do not feel there are any future opportunities to grow their careers at a company, they will likely look elsewhere.
Taking action: An individual approach
What steps can managers take to make sure their employees feel valued and fulfilled? The answer to this question is not one size fits all. Standardised retention packages are unlikely to address the individual needs of an employee and will not make them feel these needs are being taken seriously. Instead, the approach should be tailored to each employee, which will require managers to regularly meet with their employees to communicate about their wants and needs on a personal level.
While it is important to follow an individualised, personal approach when it comes to employee retention, this can be challenging for larger companies in particular, who may have to juggle and manage a large pool of talent. HR solutions like this software address every step of talent management, from recruiting to training, and streamlines the process by consolidating the data in one place. This will ultimately allow managers to easily detect problems early and find solutions together with the employee to prevent the issue from snowballing.
Training and development
Once the employee’s goals have been determined it is crucial to implement the necessary steps to realise them. This will make the employee feel the company is invested in them and in turn they will feel more invested in the company. One of the best ways to create opportunities for growth is to provide employees with frequent training, as studies have shown that occupational development is key to employee retention. Training demonstrates to the employee that they are valued and that their job is important to the success of the company, which has been proven to increase the sense of purpose in the job. Well-trained employees will also allow managers to look inside the company when filling a new position, creating career trajectories and options for their employees within the organisation.
The power of perks
Aside from training, other methods that have proven effective in retaining employees is to provide other benefits and tangible rewards for good performance. The occasional afternoon off before a holiday if a team has performed well, or fair policies like shared parental leave, will definitely not go unnoticed. Similarly, providing employees with a level of flexibility when it comes to their time management and working hours has been proven to encourage employee loyalty. Although only about half of employers offer flexitime, 95% of employees say flexibility is at the top of their list of things they look for in a job. Employees that do have flexitime tend to be happier at work, creating a better environment for all. They are healthier, too, being on average 30% less likely to suffer from stress and burnout.
A high turnover rate is extremely costly, both in terms of time and money. Taking into account recruitment, severance, lost productivity and opportunities, the cost of replacing an employee is estimated to be almost three times their monthly salary. So, in terms of the best investment of time and money, retaining employees with incentives, training and flexibility is significantly more cost effective and will take your company far.