Experienced business professionals already understand why employee retention is important with the most glaring reason being its high cost. Some studies have shown that losing a salaried employee can cost as much as twice that person’s annual salary. As if cost wasn’t bad enough, a high turnover rate reflects poorly on your employer brand, which makes it difficult to recruit top talent in the first place. Ultimately, employee retention issues significantly impact the company’s bottom line. That’s why it’s critical to avoid the hassle and expense of finding and training replacements by implementing proven employee retention strategies.
Employee Retention Strategies
Keep Track of Your Retention Rate
If you don’t have a benchmark to start from, you’ll never be able to keep track of your employee retention rate. Luckily, the formula for calculating your employee retention rate is fairly straightforward. Simply divide the number of employees at the end of a period by the number of employees at the start and multiply by 100.
For example, let’s say you start your second quarter with 50 employees. However, due to unforeseen circumstances, seven employees are no longer with you at the end of the quarter. In this scenario, your retention rate would be 86 percent.
Once you have a trackable starting point, you can begin the process of analyzing your business practices and implementing appropriate employee retention strategies.
Invest in Employee Training
The top reason people give for leaving a job is that they weren’t given a chance to advance in the company. A Glassdoor analysis showed that for every 10 months an employee spends stuck in the same role, the odds that they’ll leave your company rise another a percentage point. Taking the time to invest in your best employees can help assure that they stick around and remain engaged with their work.
Maybe you can’t promise everyone a path to the very top, but with today’s abundance of flexible, online training options, you can certainly give each of your employees a way to hone their skills.
Money Isn’t Everything—But It’s Not Nothing
A survey of 1,000 employees by human resources software company BambooHR revealed that while younger people are annoyed by low salaries, older employees appear to be less bothered.
That’s not to say money doesn’t matter. Gallup reports 44 percent of employees would consider leaving their current job for a boost in pay of 10 to 20 percent. Furthermore, according to Glassdoor, a 10 percent base pay raise results in a 1.5 percent increase in the likelihood that the average employee will remain with the company.
Listen to Feedback
Regarding communication in the workplace, remember that it’s a two-way street. You’ll never know what changes your employees want to see in your company culture until you ask.
Some ways to gather constructive feedback from your team include:
- Conduct employee surveys
- Take quality exit interviews
- Encourage management to seek constructive criticism
Promote Real Work-Life Balance
The second most common reason for leaving a job? Lackluster work-life balance. When your employees are out of the office, they aren’t crunching numbers and making sales. They are strengthening bonds with their family and friends; enjoying their hobbies; and letting off steam. Encouraging a healthy balance between professional and personal time is a fantastic way to keep your employees happy and motivated at work.