Are you worried about your employee retention rates? Is “the Great Resignation” real or just good clickbait for LinkedIn articles? Well, it’s both. In the Spring of 2021, businesses were averaging around 2.5% turnover every month. 2021 may be especially bad, but retention should always be at the top of mind for managers because of the cost of hiring and training new employees.
Why Is Employee Retention Important?
Leaving a job is not an easy decision to make. If employees are deciding to quit your company, not only does that say a lot about your business, it’s a sign that you’re losing more than just workers. Some of the other costs include:
- Money. High turnover costs your company money. Some studies show that losing an employee can cost 1.5-2X their annual salary. That includes: hiring a new person, onboarding the new person, helping the new person get caught up, and training them.
- Culture. You also have to worry about how turnover can affect your company culture. After all, the culture is made up of the people.
- Loyalty. As people see their team members leave, they’ll start to wonder if they should leave too.
- Engagement. If you’re noticing a lot of people leaving, it means your employee engagement is low. This has even more effects on your business than just losing people. It can affect everything from productivity to the quality of your product to the safety of your employees.
In order to create effective employee retention strategies, you need to know why people are leaving.
Why Are So Many People Quitting Their Jobs?
Even before the pandemic, there were many things that could cause employees to leave, including lack of growth opportunities and poor company culture. With so many more people quitting since the Covid-19 pandemic, it likely has to do with a couple different things that have been happening in the workplace since March of 2020.
- Work has gotten too stressful. With the uncertainty of the pandemic, a lot of companies had layoffs or furloughed employees. This caused employees to take on extra work, and this unexpected extra work can lead to more stress. Depending on how your field was affected (if you’re in healthcare, we can only imagine the stress you’ve been under), your employees are likely burnt out. There will always be some element of stress to work, but are your employees being pushed past their limits? That’s enough to make them quit.
- Individual priorities have changed. With so much time spent inside and at home, people have had more time to think about what they prioritize. For many employees, remote work has helped them have more time with family. When work requires long hours in the office, people are being kept away from the people they love the most.
- Not feeling appreciated. When employees go unrecognized, they start to feel invisible. This has been a problem throughout time, but there is an easy fix. Reward and recognize your employees. Meaningful rewards and employee recognition programs help create a company culture where employees get recognized often.
- Personal development and growth. No one wants to feel stagnant. Providing opportunities for growth shows an employee that you’re investing in them.
Remember, it’s not about the money (money, money). They say money can’t buy love and it can’t buy retention either. Just because you’re offering competitive wages doesn’t mean your employees don’t want more from their work life.
Because we can’t really know why every employee ever leaves their jobs, we’ve compiled a list of ways you can find out why it may be happening at your organization. So put on your detective hat and don’t worry, it’s elementary, my dear Watson (or whatever your name is).
How to Figure Out Why Your Employees Are Leaving
Like most situations, the best way to know what people need is to ask. Conduct exit interviews and allow employees who are leaving to be open and honest about why they’re leaving. For many people, it’s easier to open up about their issues with a workplace when they know they have another job waiting for them. Exit interviews can be a great way to collect information.
On the other hand, you could find out before they leave by sending out surveys regularly. The easiest way to know what your people want is to ask. Send out a survey (and incentivize people with rewards so that they actually take it).
But gathering information isn’t enough—you have to implement the things you learn from the interviews and surveys to gain trust from your employees. Only 8% of employees strongly agree that their organization takes actions based on information from surveys, so make sure you actually do something about it after you’ve gathered the information.
Creating an Employee Retention Plan
Improve your retention by creating a work environment where employees have purpose and feel valued. Here’s a list of effective employee retention strategies, including benefits you can offer to improve your retention rates:
Help employees find purpose in their work. 9 out of 10 employees are willing to make less money if it means they’re doing meaningful work. People want purpose. Period. Talk about what makes work meaningful.
Ways to do this:
- Help them catch the vision or mission of your organization with clear company values that are communicated often to the team.
- Remind people how valuable their work is by recognizing them with specific compliments that show how what they do is seen and valued.
- Have managers lead by example by talking about the purpose they find in their own jobs.
Provide opportunities for career growth. 94% of employees said they’d stay longer at a company that invested in their career development.
Ways to do this:
- Create career plans or openly discuss long term goals with each employee.
- Discuss together what skills they can develop. This is a great opportunity to find gaps in talent at the company and see where employees can grow to fit in.
- Ask if there’s anything extra they’d like to do. Maybe there is a resource group for employees or an internal committee they can join.
- Offer to send them to a conference of their choice.
- Pay for an online course in a subject they’re interested in.
Provide flexibility for work-life balance. Make sure your employees know that you value work-life balance.
Ways to do this:
- Offer flexible work schedules.
- Offer unlimited or flexible amounts of PTO.
- Encourage people to take that PTO.
- Don’t punish people (whether explicitly or implicitly) for taking PTO.
Offer opportunities to take sabbatical. How is this different from PTO? First of all, it’s longer. Second of all, it usually has a specific purpose. For example you can encourage employees to use sabbatical to learn a new skill. They might take a course, travel somewhere, or take up a new hobby. It doesn’t have to be strictly related to their job as it could be a chocolate-making course or EMT course. This time away to learn a new skill is not only rejuvenating for the employee, it helps build up soft skills like creativity and communication which can make them a better employee when they return.
A sabbatical can also be an option for employees struggling with their health, allowing them extra time to recover from surgery and/or to figure out new routines to help manage their health. This is a great way to show you value an employee’s health over their work. Sometimes the length of medical leave or maternity/paternity leave just isn’t enough to really recover and come back refreshed and ready to work.
Adapt to employee needs as they change. This can be hard, especially at large companies where policies may have to go through several rounds of approvals. However, keeping up with what employees want will help you know how to keep them. Specifically, get to know your unique employees and what they need. No two people are the same!
Employee Retention Strategies
- Ask your employees what they need.
- Give them what they need.
Okay, okay, it’s not always that simple, and resources may be limited at your company. So, while you can’t always give employees everything that they want, focus on a few things. One change doesn’t take many resources at all and that’s appreciating people for all their hard work. Whether it’s with a simple thank you, or better yet, a great rewards and recognition program, show your people that you care and they’re more likely to stick around.
P.S. Awardco can help. Give us a call.