Employee retention is the effort an organization takes to retain its most important assets–employees. A low or high employee retention rate can have a direct negative or positive effect on the company’s overall performance respectively. Every company needs to know and manage its employee turnover rate if it wants to remain in business for a long time.
However, employee retention is a crucial element to help any organization manage and avoid high employee turnover. The importance of employee retention cannot be overemphasized since the cost of employee turnover can be up to 2.5 times an employee’s pay depending on the employee’s role. Other costs involved include reduced productivity, the cost of training new employees, and so on.
Take a look at these employee retention statistics.
- An effective onboarding process can lead to a reduction in new hire retention by up to 82.%.
- Companies that allow their employees to work remotely have a 25% lower employee turnover.
- 79% of potential employees will turn down a job offer from a company that won’t take action against unethical behavior.
- 77% of organizations pay attention to employee experience as an employee retention strategy.
- When employers acknowledge their employees for a good job done, it can result in a 32% reduced turnover.
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Employee Retention Strategies
- Retention Starts With Recruitment
HR managers should recognize that retention starts from the beginning of the employment process. Dan Pickett, CEO of Nfrastructure, says It starts from applicant screening to choosing who gets interviewed. He says companies should identify what aspects of organizational culture and strategy they want to emphasize, then spot those things out in their candidates. Nfrastructure employs 300 people currently and over 97% retention rate, which is unheard of in the IT sector or any industry at all. Bad hiring decisions contribute to 80% of employee turnover. Interviewers should ask questions related to company values and culture to find the best fit among their candidates.
- Health Insurance
Employers should provide health coverage for their employees. This is an important strategy from the recruitment stage to the retention of employees. Surveys show that:
- 56% of US employees with employer-sponsored health coverage said it is a major factor in deciding whether to stay at their current job or not.
- 46% said health insurance is a factor that influenced them to choose their current job.
These show that employees are more likely to stay at a job that offers them support when applying for health insurance as it makes them feel valued.
- Flexible Workplace
Many people now look for a flexible working arrangement in their new jobs. Hybrid workplaces have now become an expectation rather than a benefit. Especially since the COVID-19 lockdown, more people want jobs that allow them to work remotely. 74% of US employees are willing to quit their current jobs to work from home. Remote jobs are a win-win for employees and employers. Remote work saves time and reduces transportation costs for employees. They have a more balanced work-life and reduced distractions, and it is generally safer to work from home. Employers can reduce their overhead costs, infrastructure costs, avoid office politics, and reduce absenteeism among employees.
- Reward Employee Efforts
Although it is easier to measure results than the efforts employees put into achieving those results. For example, an employee (Alex) might put in so much effort to get a sales deal or reach a certain target, while another employee (Sam) just simply reaches their target quite easily. This does not mean Alex is incompetent, and it just shows that things won’t always go as planned. Companies should show empathy to employees and recognize their efforts, which makes them appreciate their jobs and employer. Instead of appreciating only the result, companies should also compensate employees for hard work.
- Engage In Csr
Some reports show that millennials and Gen-Z employees like to be socially responsible. They want to give back to society in one way or the other. A CSR program where employees can contribute to other people’s wellness is an excellent employee retention strategy. These things will inspire loyalty and engagement among your workforce. Engaging in CSR activities will give the employee some sort of responsibility to their community.
- Sabbatical Programs
A sabbatical program is one good way to retain your best employees. It is a sign that you appreciate your employee for their hard work and long-term service. Sabbatical leaves can be for six weeks or more, according to the organization’s sabbatical policy. There’s a lot to gain from a sabbatical leave, and employees can use this period to gain new skills and work on their passion or just the time it gives them to spend with loved ones. Your employees will come back more motivated after a good sabbatical leave.
- Provide Monetary Compensation
Lack of compensation is one of the major reasons employees quit their job. To attend to this, make sure every employee gets a fair and deserved appraisal. Your employees won’t be motivated if they are not properly compensated. Companies need to adjust their salary structure regularly to better compensate their workforce with increased salaries and more.
All employee retention strategies are beneficial to employers in the long run. It boosts overall productivity and really gives them a team of professionals committed to their brand.