Whether your business is small or large, employee retention is an important strategy in your day-to-day success. Simply put, your retention rate is “how long your employees stay with you.” It’s important for a number of reasons.
First, if you’re constantly replacing employees, you’re wasting a lot of money. New hire training costs an average of $702, and that doesn’t include the couple thousand dollars you’ll probably lose in recruitment time.
Then you can factor in productivity cuts (it takes months to bring a new hire up to speed), and the potential of bad hires -- which means you’ll have to start all over from square one. Plus, low retention is a drag on morale -- there’s nothing grimmer than working for a company with a constant revolving door of employees.
But hiring good talent and keeping them on for long periods of time can boost your productivity. Veteran staff that know your routine are capable of keeping your business running like a well-oiled machine, and boosting morale.
So let’s look at some strategies to bump your retention rates up.
Throughout our series on workplace retention, we’ve talked about what makes a good worker both stay and leave, as well as how corporate culture impacts retention rates -- all of which heavily emphasized the importance of engagement.
As we’ve repeated -- lack of engagement can be detrimental to performance among your struggling employees, and drive away even your well-paid, well-performing employees. It’s the number one force that funnels retention rates to the ground.
But if you’re able to create an engaged workspace, you’ll find things are running smoothly in no time. An engaged employee is one that’s happy to be at work, enjoys their time in the office and their relationships with their co-workers, and has a relatively low-stress day on average.
One way to encourage engagement is to avoid micromanagement. It may be tempting to micromanage -- and while it may seem to drive efficiency, it actually does the opposite. One Forbes study reports that 68% of employees found it dampened morale, and 55% found it led to a decrease in productivity.
Many first-time managers often make the mistake of nixing water-cooler conversations in order to increase productivity, but this is also a mistake. Fostering team relationships will help build an atmosphere of engagement.
Studies show that most employees with no work friendships are unengaged and thus unlikely to remain with the company for long -- instead, encourage arriving early to meetings so your team has a few minutes to chat with one another.
Engagement is often a subconscious influencer on an employee’s decision to leave, but now let’s talk about the biggest active influencer -- upward mobility. It’s the single largest issue employees cite as their reason for leaving a company.
Employees want to know they have a future with you. If they don’t see an opportunity not just to remain with the company, but to grow into a better position with better opportunities, they’ll most likely take the first opportunity to transition to another employer who can give it to them. 86% of people born after the year 1981 say career training and professional development were critical in their choice of workplace.
There’s a lot you can do to show your employees you’re interested in their future. Offering educational assistance from the get-go demonstrates that you value their continued growth, and keeping them up-to-date on internal job boards and promotions allows them the opportunity and encouragement to move upward within your company.
Regular mentoring programs have been shown to almost double an employee’s likelihood to remain with a company. It’s also important to make sure that your regular reviews aren’t just about job performance, but also about career track.
We’ve previously written a little about how company culture can impact your retention rate here. Simply put, your company’s culture is “the way things are done” at your business -- everything from your basic policies, your unwritten practices, to your standards and values.
Ultimately your company “culture” will set the mood of your office -- be it lighthearted and fun, or stoic and oppressive. It can really make or break the employment experience for your team.
It’s important to set a positive standard for your company, and most studies encourage fostering open and communicative team relationships. Especially important is sharing your company values with your team.
In our article about company culture, we note that non-profit industries report three-times the employee engagement of for-profit companies.
When Michigan brewer The Mitten Brewing Company began allowing its employees to choose social causes to donate to (such as paying school lunch debts in neighboring towns), it reported similar retention rates to the non-profit industry -- showing that this sort of positive corporate culture can be achieved almost anywhere.
Do you need help finding and retaining the best talent in your industry? Reach out and let us help.