Discover 15 effective employee retention strategies for 2024, including competitive salaries and flexible work arrangements. Enhance workplace satisfaction and reduce turnover with these proven methods.
By Brad Nakase, Attorney
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Millions of workers from many industries have joined a global mass departure from the workforce in the past 18 months. Numerous explanations have been offered for the mass flight, but reports suggest that a number of factors, including low pay, little opportunities for professional growth, a bad work-life balance, widespread dissatisfaction with the leadership of the business, and many others, could be to blame.
Employment has become an employee’s market as a result of the COVID-19 pandemic-induced “Great Resignation.” As workers discover a connection with others who do not feel appropriately valued or recognized by their employers. Users of TikTok have created words like “silent resigning” and “act your wage.”
When workers make decisions based on their own values, bosses are forced to reevaluate what genuinely makes their organization desirable to work for. You should definitely think about employee retention methods if you believe that your company could lose top talent or if the Great Resignation is already starting to happen to your best employees. These 15 practical tips will help you retain your finest employees and increase job satisfaction among your staff.
Making your workers feel that their job is valued starts with paying them a wage that is commensurate with their effort and diligence. More than anything else on this list, paying employees fairly is essential if you want to effectively keep them. Otherwise, you won’t be able to get the most out of their time.
Workers should receive fair compensation for their labor and time, as well as enough money to cover living expenses, regular pay increases in response to inflation, and increased pay for increasing levels of expertise in the workplace. Furthermore, employees ought to receive greater compensation for each additional responsibility they take on.
Finding out what the livable wage in the region is, is the initial step toward paying your employees what they deserve. Remember that even with the present federal minimum salary of $7.25, reports indicate that this hourly rate is less than an adequate wage in almost all U.S. counties. For a living wage estimate for any state, city, or metro region, visit MIT’s living salary calculator. Any job should start at this same basic rate, and earnings should go up from there.
The second phase is to find out what salary and compensation your rivals are providing, as well as the kinds of raises they have been giving out. Your greatest workers are prone to leave if you do not pay them as well as your competitors do. Poor performers will quit, which will ultimately cost you a lot more money than if you simply gave the top workers a raise.
It costs far more to recruit and teach a fresh hire than it does to increase an existing employee’s pay. The SHRM (Society for Human Resource Management) calculates that, when headhunting, recruiting, and training expenses are taken into account, replacing a worker can cost 6 to 9 months of their compensation. For instance, it would cost between $30,000 & $45,000 to substitute a worker who earns $60,000 per year, not including the enormous losses in output, income, and workflow that occur during the recruiting and onboarding phases.
A significant increase of over 90% from prior to the COVID-19 epidemic, 36.2 million people in the US will work remotely by 2025, according to “Future of Workforce Pulse Report” by Upwork. Employee satisfaction and productivity have been demonstrated when working remotely, in addition to being a practical way to stop the spread of illness. Working from home fully or in part is now feasible in many different businesses thanks to contemporary technologies.
Upwork’s analysis highlights the benefits of working remotely, which include decreased unnecessary meetings, enhanced scheduling flexibility, no commute, fewer distractions, and enhanced autonomy. However, further research is necessary to fully understand the long-term impacts of remote work. Employee efficiency and fulfillment will increase when they are not forced to dedicate time stuck in traffic, worrying about parenting, or losing time to long meetings or schedule conflicts.
Offering adaptable work-from-home choices could serve as a motivation to retain your best staff for the long term, even while remote work is unlikely to be a permanent answer for many firms and an increasing number of Americans go to their workplaces each month.
According to research from SHRMt, companies that provide more flexible employment possibilities to their employees also considerably improve employee retention. This is in addition to providing remote work. Before the pandemic made working from home usual, according to a 2019 survey, almost two-thirds of employees said they were more productive working from home because there were fewer interruptions, diversions, and commutes. Since creativity is not always a fixed resource, giving your staff flexible work schedules enables them to identify the most productive and efficient times to concentrate on their work.
In addition to offering flexible scheduling, cutting back on the number of hours worked in a day or week at work can really boost productivity and promote greater staff retention. A 2014 Stanford University study discovered that if an employee works more than 50 hours per week, productivity starts to sharply fall. Workaholics who come early and leave late are frequently seen to be more committed and productive, but this isn’t always the case if a large portion of their output is lost to fatigue or burnout.
Encourage and foster a healthy work-life balance for yourself as well as your staff. This comes in at number four on our compilation of essential retention tactics for businesses. Workers cite the balance between work and life as a reason why they are considering switching careers or the rationale they have turned down possibilities, especially since the pandemic significantly altered their value of work. The aforementioned strategies for achieving work-life balance include working from home, scheduling flexibility, shortened workdays, and more modest initiatives like advising staff members not to check their email or take calls about work until they are in the office or on the job. To keep a positive working relationship with employees, it is important to respect their time off.
Studies reveal that not only is it far easier to keep long-term workers who feel their employers are recognizing and rewarding them appropriately, but they will also put in more effort and become more productive. Sadly, more than 80% of American workers said they don’t feel appreciated or rewarded. Businesses that prioritize honoring their staff members several times every month are forty-one percent more likely to observe greater staff retention and 34 percent more inclined to experience greater staff engagement, according to a Brandon Hall Group analysis.
There are several methods for praising and rewarding your staff, but it’s crucial to ensure you give both public praise and monetary compensation equal weight. Not only does it feel good to have your employees acknowledged, but it also benefits the culture as a whole to know that others are valued. Among the most significant and effective incentives you can provide a worker are monetary prizes, whether they take the kind of hard currency, gift cards, or even additional benefits like paid time off. It may be a good idea to pose open-ended inquiries to staff members regarding their desired forms of compensation.
Make certain that you are thanking your staff for their efforts as well as their results. Occasionally, goals are not realized, transactions are not completed, or initiatives may not turn out to be as fruitful as anticipated. Although this may come as a letdown, let your staff members know that their efforts are valued even if the objective was not met. By doing this, you can assist your staff members when they are feeling dejected or hopeless and inspire them to try better the next time.
Establishing an environment at work that people want to participate in is another critical retention tactic. According to a Glassdoor survey done in 2019, an organization’s culture has a significant impact on maintaining people in their positions as well as prospective hires (77 percent of respondents indicated they would think about the business’s culture). In fact, a strong corporate culture was mentioned by almost two-thirds of staff members as among the key factors keeping them from quitting.
Many of the retention methods covered in this article may need to be put into practice to develop a fantastic workplace culture. Such initiatives may be paying your staff for their work as much as their accomplishments, developing a purpose for your business, and including them in creative decision-making regarding the direction and objectives of the company.
It is imperative to make sure that your business is welcoming and inclusive of varied groups, particularly the LGBTQ & BIPOC communities, who frequently find it difficult to get secure and warm work environments. Talent will attract and remain in a larger, more varied, and stronger community in an organization that values people of all ethnic, gender, racial, and sexual preferences.
One of the most important strategies for staff retention is raising employee engagement levels within your organization. An unhappy employee could have a more detrimental impact on the company, lower output, and lower morale all around. Make sure your employees have a voice and that their opinions matter so they may express themselves.
Think about giving your employees opportunities to offer frank feedback without fear. Your employees most likely know more about the best ways to finish a task than you do if they have been doing it for a longer amount of time. Therefore, giving them the opportunity to collaborate and work on process and workplace improvements will keep them engaged and give them the impression that they contributed to the company’s culture.
In the same way, try not to put undue pressure on individuals to participate in pointless activities or engagement-boosting ones without a specific goal in mind. If an employee does not want to participate in activities unrelated to the work for which they are paid, forcing them to socialize or engage in other activities may be a reason for them to resign. Since every workplace is unique and doesn’t require the same level of employee participation, one of the best ways to avoid this issue is to ask employees what they want.
Prioritizing teamwork is another crucial element of employee retention in some contexts. Offering chances for collaboration, particularly within divisions, can improve teamwork and overall employee engagement. Strong collaboration not only fosters relationships among coworkers and improves overall performance but also has the potential to enhance workplace culture. Good manager-employee cooperation can help departments match skills and weaknesses, which can lead to a more strategically distributed workload.
76% of workers report experiencing burnout occasionally at work, and 28% report feeling burnout “always” or “often,” according to a 2020 Gallup survey titled Employee Burnout: Causes and Cures.” Gallup’s poll found that contrary to popular belief, which holds that burnout is the consequence of an excessive workload and can be avoided by taking time off or reducing work hours, employees’ perceptions of their work have a bigger impact on weariness than the actual number of hours they work. Employees who report more job satisfaction, appropriate recognition and awards, and more work-related flexibility—such as flexible scheduling, remote work, or fewer hours worked—also report higher levels of well-being.
The top five causes that cause employee burnout, according to the Gallup research, are:
Developing and improving your company’s overall culture, raising employee engagement, and offering open, understandable, and consistent management are some strategies to reduce employee burnout. Providing wellness initiatives and other perks can also be very helpful in retaining staff.
The COVID-19 pandemic has served as a timely reminder that both physical and mental well-being are necessary for a happy, functional community. There are more ways to take care of your employees’ health besides just providing benefits like remote work or flexible scheduling. Furthermore, you should ensure that safety and health protocols are followed, that your workplace is clean and hygienic, and that there are strict policies that forbid employees from reporting sick to work. Sick pay must also be provided in order to incentivize employees who are required to go to work to stay at home when sick. As an additional way to show your employees how much you value their health, make sure you provide them with options, levels, and comprehensive coverage of the highest caliber.
Some companies, like LinkedIn, have also found success by providing mental health time off to all of their employees, which helps them manage burnout at the same time. Reportedly, taking this week off prevented worn-out workers from worrying that they missed important emails, project notes, or meetings.
Even though a lot of the retention tactics on the list up to this point can be considered benefits of a certain employment, benefits can take many other forms. Apart from providing essential benefits like telecommuting, adjustable work hours, and quality medical coverage, you may also offer your staff members savings on a variety of items including meals, travel expenses, mobile phone service, and rental cars. These services—AnyPerk.com, BenefitHub.com, and CorporatePerks.com—offer excellent perks and savings at national retailers to your employees at reasonable monthly prices, starting at just $5 per employee. Additionally, you can establish your own contacts with nearby companies who could be willing to give product discounts.
Excellent companies understand the need for training throughout the job onboarding procedure, but they also understand the need to make ongoing investments in employee up-skilling and training. Employee retention increases and employee satisfaction is positively correlated with investing resources and time in upgrading them and giving them exposure to further training and education relevant to their area.
A particular talent or area of expertise can be learned by a large number of people. However, not everyone is a good fit for a current team or shares the company’s and its employees’ cultural values. Selecting candidates based on their cultural fit will help retain staff over the long run since the newcomers will get along with the group more quickly, increasing everyone’s comfort and accelerating the pace at which work gets done. A Harvard Business Review piece lists poor hiring practices as one of the main reasons for losing employees, with 41% of employers polled believing that a single poor hire can cost their company up to $25,000.
Nearly 50% of workers quit their jobs due to lousy management, according to a 2018 Udemy analysis of the experience of workers. A competent manager, however, functions more like a “coach” than a “boss.” The main distinction is that a coach recognizes their staff as members of a team, but a boss is viewed as an unsatisfactory source of demand who micromanages every part of their work. By providing goals, guidance, and encouragement while preserving a high level of individual autonomy, a smart employer or coach helps steer team members on the proper path.
Regretfully, there is no approach that can ensure flawless employee retention. Your staff members will eventually have to go, either retiring or looking for employment that better suits their needs. For total employee retention, understanding when to bid goodbye and managing employee off-boarding efficiently is just as crucial as each of these other tactics. The remaining staff members should be certain that they will receive excellent care should they decide to move on.
As crucial as it is to motivate staff members to stay, creating a successful retention plan may depend more on understanding the reasons behind their departures. As crucial as onboarding can be is the process of discharging an employee. This is known as off-boarding. A business can discover why a worker is departing and what it could possibly be able to do going forward to retain employees by encouraging an amicable departure, ensuring the transfer of information, safeguarding the company’s assets, and departure.
The exit interview is a crucial step in the process of off-boarding that can help companies understand why workers are leaving. Several prevalent causes, particularly following the COVID-19 pandemic, include as follows:
The “Motivator-Hygiene” hypothesis, commonly known as the “Two-factor” theory, was widely pushed by Frederick Herzberg (American psychologist), who is arguably best known for his contributions to company management. The hypothesis states that two groups of elements affect motivation at the job and can either help or hurt satisfaction among workers, which in turn promotes employee retention.
The elements in the place of work that genuinely foster motivation are referred to as the hygiene aspects. The physiological demands that every worker expects to be met are the Herzberg hygienic factors. These variables are centered around things like income, job stability, wholesome workplace relationships, and favorable working environments. No number of motivational reasons will be able to keep employees in the organization if these fundamental hygiene factors are absent.
Conversely, the driving elements are contingent upon the specific job conditions. These are the things that spur workers on to higher levels of performance and deepen their loyalty to the organization and their positions. These elements center on possibilities for both professional and personal growth, recognition, progression, increased responsibility, and more.
All 15 of the employee retention tactics we listed above are useful in different contexts, but since every company has different demands, certain approaches are more or less appropriate than others.
Workers themselves can directly benefit from competitive compensation, wellness programs, benefits, and career advancement. If you pick a couple of these tactics to concentrate on, you may continue working toward improving employee retention even though your company might not be able to provide all your employees are seeking in every one of these categories.
Important tactics to help retain staff members include providing work-from-home options, flexible scheduling, encouraging a balance between work and life, and lowering employee fatigue. Given that some business types are inherently incompatible with remote work or flexible scheduling, it could be a good idea to concentrate on encouraging a positive work-life balance and providing burnout prevention techniques.
A positive work environment may be created by fostering a strong company culture via recognition, incentives, teamwork, engagement, and employing and managing staff with integrity. Whatever your company does, these are all essential, but based on what you do, it can make greater sense to concentrate on a few of them than others. Your work environment is critical to high employee retention, regardless of how well you manage to demonstrate your concern for your staff.
A successful corporation depends heavily on its ability to retain its workforce. The above-mentioned tactics are not a magic bullet; rather, they are part of a broader movement to assist and look out for workers, which many businesses aren’t doing much of. Many employees now recognize the worth of their energy and time because of the pandemic, so it’s critical to ensure that your business is demonstrating to its clients how much it values their time and effort.
1. What exactly is employee retention, and what makes it crucial?
The ability of a business to retain its employees is known as employee retention. With the appropriate policies and procedures in place, you can stop excellent employees from departing, regardless of your turnover rate. Paying your staff fairly should be the first step.
2. How should my staff turnover rate be calculated?
To get your turnover rate, divide the total amount of departures by the average amount of workers. Then multiply that figure by 100 to get the percentage.
3. Which job posting websites are the best?
Jobs can be advertised on social media platforms like Facebook, Twitter, and LinkedIn. See our post on Where to Post Jobs in 2024 for a comprehensive list and how-to guide on publishing jobs online.
4. Which hiring software is the most effective?
If you take too long to reply, a fantastic job candidate might vanish. Employers can locate the most competent applicants for open positions quickly and efficiently by using recruiting software. Take a look at our picks of the Top Recruiting Software of 2024 for more details.
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