This is How to Keep Employees Loyal and Improve Retention Rates
There are many reasons why employees may choose to leave a job. It could be due to insufficient pay, lack of flexibility, an overloaded schedule, or unrealistic expectations. However, when it comes down to it, most employee turnover is based on the leaders not trying to keep employees at the company.
According to Gallup, over 50% of exiting workers note that their organization or manager could have done something more that would have prevented them from leaving. However, only 33% of these employees spoke with a manager about leaving the company before they left.
You’ll never be able to keep every employee, however, there are ways to improve employee retention. But first, let’s look at why you should be concerned with reducing turnover.
Why Is Employee Retention Important?
There are many good reasons to work on improving employee retention rates. For one, when you replace an employee, the process can cost from half to two times the annual salary of that employee. Some of the organizational and financial costs include:
- Onboarding and recruitment costs
- New employee training costs
- Inefficiencies in operations
- Operational delays and under-resourcing
- Burnout and worsened employee morale
- Lower productivity
- Lack of organizational knowledge
- Loss of innovative leaders or thinkers
- Lower customer satisfaction
Maintaining a low turnover rate promotes the success and health of your business. The cost, stress, and time associated with training new workers are huge and turnover can lead to poor business outcomes.
Common Causes of Turnover
To find ways to alleviate high turnover, it’s essential to know the main causes of it. Below are a few of the most commonly cited reasons for employees resigning.
Lack of Purpose: Surveys have shown that organizations with a purposeful mission have less attrition. Clarifying or better defining your organization’s mission is a great way to motivate employees. If there isn’t a strong culture at your workplace, turnover might be elevated. Having employees who believe in the company’s purpose are more likely to stay.
Poor Compensation: Employees who aren’t being paid well often start to look for greener pastures. This is especially true for workers in their younger years. Benefits and compensation are the number one reason people choose to change jobs. Adding to base pay is an excellent method to increase retention at your business.
Feeling Overworked: When employees are asked to do too much without sufficient resources, it can lead to burnout. This can cause high stress and even create a feeling of self-blame or helplessness. Common sources of burnout include conflicting values, a lack of fairness or positive reinforcement, socially toxic workplaces, or a lack of dependable management.
Boredom: Some employees will leave for other companies if they aren’t feeling engaged at work. Generation X is most likely to list this as a reason for moving companies. Managers need to help by encouraging teams to meet goals, but also by providing challenging projects. A growth mindset is a great method to excel at this.
Poor Management: A lot of reasons that people leave a company come down to management. This is why it’s essential to ensure the people in management positions can properly manage. If they cannot, they should be provided with training and support or moved into different roles.
Lack of Recognition: Feedback matters and we aren’t only talking about praise. Managers should speak about wins, bundle encouragement with constructive advice, and focus on specifics to address weaknesses. Having regular check-ins and conversations is an excellent place to begin. Recognition can also come from other people in the organization depending on the specific situation.
Methods to Improve Retention
At this point, you have a good grasp on why employee retention is important, and the reasons that workers often cite as reasons for leaving a business. The only thing left is to determine how to improve retention. The good news is that you have a lot of options, some of which you might not be aware of.
Show Appreciation for Employees
Employees at all levels and in all positions want to be appreciated for what they do. It doesn’t matter if it’s someone on the cleaning crew or a scientist doing specialized research. Appreciation is the best thing you can do to fight high levels of employee turnover.
The first way to show you appreciate what people do is by making the pay reflect that. If you pay people the bare minimum, they’re not likely to stick around when they get another offer. Employees should be paid well to demonstrate that they matter to the company.
Benefits are another thing that can factor into this equation. Poor benefits or no benefits aren’t going to impress employees. As with low pay, people who come on a job with a lack of benefits are more likely to leave as soon as they can. A robust benefits package can go a long way.
If it’s possible in your industry, incorporating flexibility into the workplace is also a way to show your appreciation for hard work. This can apply in one of two ways (or even both). One option is to allow your workers to work from whatever location they prefer. The other is to create schedule flexibility that works with employees’ lives. These are favors that will make a lasting impression.
Finally, make sure you are acknowledging the high performers in your organization. Those who do their best and exceed expectations are deserving of something special. This can even make those who are less prone to achievement work harder knowing it could lead to positive attention.
Create a Positive Workplace Culture
The second major method to improve turnover rates is through building a positive workplace culture. When the workplace is a compelling place to be, employees are less apt to leave. Give them reasons to enjoy coming in every day and you will develop a healthy work culture.
Implementing a diversity, equity, and inclusion (DEI) plan at your place of business is an excellent place to start. The benefits of this are undisputed. Many research studies indicate that businesses that practice DEI outperform the companies that do not. Plus, it can lead to boosted morale and higher productivity.
Another choice is to implement mental and physical wellness initiatives. These programs can help foster great skills, such as productivity, self-worth, problem-solving, resilience, empathy, and mindfulness. There are many options for initiatives from meditation courses to fitness classes.
A final way you can build a more positive workplace culture is by being open to feedback. When employees feel safe enough to share the things that bother them, they’re going to be more likely to stay at a company. Businesses need to take these suggested improvements seriously to create a workplace everyone enjoys.
Invest in Workers’ Futures
Finally, we come to the last method to improve retention in the workplace. You can do so by investing in the futures of those who work there. People who feel supported will have a more substantial connection to the company they work for. It can make a lot of difference and it offers business benefits at the same time.
One of the first ways to implement this is by ensuring you are offering career development for current employees. Things like upskilling initiatives give employees new skills and let them develop the ones they already have. A career development plan should be created for every employee based on their skills and future goals.
When you hire from within the company, this can also help cut down on employees who leave. On the other hand, bringing in management and executive positions from the outside can lead to the opposite. Seeing others promoted into positions of more responsibility lets other employees see that it could happen for them, too.
Mentoring opportunities are another great way to show you care about the future of your employees. Seasoned employees with impressive skills can share them with people who are new and less experienced. Providing a way to explore new ideas and learn more about other positions is a great method of turnover prevention.
Effective employee retention is essential because losing staff comes at a cost of both time and capital. Knowing why employees leave a company, and implementing methods to improve employee retention can keep your organization thriving, even in the ever-changing workplace landscape.
If you’re looking for a way to expand the knowledge of your employees, Knowledge City is here to help. We can help increase employee performance, save time with convenient training videos, and reduce employee turnover at the same time.