52 Ideas to Improve Your Company's Employee Retention Rate
By 2030, the US is going to lose $430 billion annually due to low talent retention. Here are 52 ideas to improve your employee retention rate in 2021.
You get to work on Monday morning to find a resignation letter on your desk. That's already the fourth this month, and it's only the 13th.
What do you do? Beg your employees to stay, tell them not to bother working their notice period, or ask them to help recruit their own replacement?
Dealing with high employee turnover rates is every CEO, HR director, and manager's nightmare. As if it wasn't already difficult enough, 2020 threw us a real curveball for employee recruitment and retention.
But, getting your head around improving employee retention rate isn't too difficult, there are lots of things you can do.
Follow these steps to not only retain your employees but develop an engaged, happy, and productive workforce!
The Real Cost of Low Employee Retention Rate
Research has shown that each time a company has to replace a salaried employee, it costs them an average of 6-9 months of that employee's salary.
However, reports have shown that costs also vary depending on the skill level of the employee.
It costs around 16% of the annual salary to replace those in low-paying jobs, such as customer service operatives. For example, to replace someone earning $10/hour would cost $3,328
It costs around 20% of the annual salary to replace those in mid-range positions, such as managerial work. For example, to replace a $40,000 salaried manager would cost $8,000.
It costs around 213% of the annual salary to replace those in highly specialized positions, such as CEOs. For example, the cost to replace an employee earning $100k would be $213k.
5 Reasons Your Employees Are Leaving
First of all, it's not just you. Around 42 million US employees left their jobs voluntarily in 2019. That's 27% of the entire workforce.
The reasons for employee resignations have been studied extensively. Of course, there are cases where employees are asked to move on or their personal circumstances change beyond what a business can accommodate. However, Work Institute estimates that 78% of resignations could have been prevented by employers.
Use exit interviews and gain insight from colleagues and managers as to reasons for resignation. Count the instances of each reason for resignation and you will therefore identify where the main problems lie within your organization.
There are 5 broad categories for voluntary resignations that could have been prevented by employers.
1. The Recruitment Process
It all starts with recruitment. If the recruitment process isn't right, how do you ever expect to build an effective workforce? There may be issues with your job specifications, interview processes, handovers, and inductions.
5 things you may hear if employees are leaving due to issues with your recruitment process:
- "I thought I'd be doing more/less of..."
- "I don't really get what I'm meant to be doing day to day/my role is unclear"
- "I've found my dream job"
- "I just don't really enjoy what I do"
- "It's too hard"
2. Compensation and Perks
Is the pay right? Pay and benefits are some of the most important factors people consider when choosing employment. Pay is important but also consider lifestyle-related benefits and flexible working options. If your employee is having an 'off day' and does a quick online job search, will they find better perks with one of your competitors?
5 things you may hear if employees are leaving due to issues with your compensation and perks:
- "This job isn't paying enough"
- "My commute is too long to do 5 days a week"
- "I'm underappreciated for the work I do"
- "I've found my dream job"
- "I need to spend more time focusing on myself"
Around 9% of people that resigned from jobs in 2019 said it was directly related to insufficient pay or benefits.
3. Daily Life in the Job
How is your company culture? Employees need to feel comfortable, valued, and have a manageable but challenging workload. Developing your brand so that employees feel proud of the company that they add value to will help improve employee retention.
5 things you may hear if employees are leaving due to issues with daily life in the job:
- "Our ways of working are outdated"
- "The office is miserable"
- "There's a toxic workspace / toxic colleagues"
- "I'm bored"
- "I'm working all the time"
Around 38% of people that resigned from jobs in 2019 said it was related to daily stresses (10% Job characteristics, 10% Well-being, 6% Work culture and environment, 12% Work-life balance).
4. Advancement Opportunities
You need to provide advancement opportunities for employees. You cannot expect an employee to stay in the same role, with no progression or training for too long. If you aren't providing a clear path to advancement, employees will leave.
5 things you may hear if employees are leaving due to issues with your management and leadership:
- "I'm bored"
- "I've found my dream job"
- "I don't enjoy it anymore"
- "I don't see myself going anywhere with this company"
- "I'm not challenged in my role"
Around 20% of people that resigned from jobs in 2019 said it was related directly to career advancement.
5. Management and Leadership
Take a look at your managers. People leave managers, not jobs. Think back to when you've had a strained relationship with a manager, did it change your attitude to your work? It is virtually impossible to enjoy what you do under strained working relationships.
5 things you may hear if employees are leaving due to issues with your management and leadership:
- "I don't like my boss"
- "my workload is too high / I'm not supported in my role "
- "I'm underappreciated"
- "I just don't enjoy what I do anymore"
- "I'm not challenged"
Around 12% of people that resigned from jobs in 2019 said it was directly related to managerial behaviors
52 Ways to Improve Employee Retention Rate
Improve your recruitment process
1. Write an accurate job specification, you want to hire the right employees so make sure to start with clear expectations.
2. Uproot the interview process, ask the questions that matter and if you're unsure about a candidate, ask for another interview.
3. Try recruiting graduates, graduates can be shaped into some of the most loyal employees.
4. Encourage applications from minority groups - and then treat them right! Encourage minority groups to apply for roles such as 'staff rep' or to be part of focus groups within the company. Value their opinions.
5. If your resignee has grown sick of the role, start fresh and ditch the handover period. Don't risk passing toxic views of the company on to your fresh recruit.
6. Plan a thorough induction for each employee with plenty of regular support. Include 1-to-1's with each person in a role of significance to the new recruit. This will help them really understand and fit into their own role.
7. Clarify the job role - make sure your recruit knows exactly their remit. If they have concerns, upskill them with extra training courses. If they have extra skills, incorporate those into the remit of their role.
8. Create mentor programs for new employees.
Revamp your compensation, perks, and benefits
9. Pay well, research what your competitors pay, and improve on it.
10. Offer at least the standard range of benefits such as bonuses, shopping portals, discount vouchers, health insurance, and discount cinema tickets.
11. Offer unique perks that improve company culture. Ideas include: 'dress down Fridays', 'bring your pet to work day', and having your birthday off.
12. Offer social incentives and benefits to nurture workplace friendships, discounts at the local restaurant/cinema/bowling venue when a group booking is made.
13. Make sure you offer lifestyle-related benefits such as fitness and wellbeing memberships. An onsite masseuse always goes down well.
14. Implement volunteering days. Allow employees to work volunteering for a local charity for 5 days each year.
15. Have great flexible working policies - 2020 has shown that flexible working is possible so respect that and allow your employees flexibility.
If you're a smaller company or a start-up, competitive salaries may not be easy to offer, this is where you can come into your own. Ask recruits what they need and do your best to offer it.
16. Empower teams and social relations by creating regular recognition systems. Such as, 'nominate a colleague who went above and beyond' monthly awards. Encourage employees to nominate colleagues they've been impressed by and reward the recipients with vouchers.
17. Acknowledge achievements and milestones with discretionary benefits. Shared meals, social events, and days out are usually popular with employees.
Improve the Day to Day Work and Office Culture
18. Create the right culture by developing your brand so that employees are proud to work for you.
19. Don't take yourself too seriously and let your workers have fun when appropriate, help improve engagement by taking the tie off every now and then.
20. Promote transparency and openness. Involve all employees in business decisions at all levels. Help your employees feel like they are valued by sharing important information with them. Within your teams, promote honesty between colleagues and encourage feedback.
21. Encourage teamwork, have team meetings with fun activities, and teambuilding exercises to lighten the mood. Set team targets and incentives.
22. Actively promote a healthy work-life balance and encourage employees to totally log off when they aren't working.
23. Occasionally send employees home early, this will do wonders for morale. If a difficult deadline is met, or it's the final Friday before the Christmas shut down period, tell them they've done a good job and send them home to their families.
24. Make sure employees understand that a sick day is ok. Preventing employee burnout is of vital importance. When an employee indicates they are unwell, make sure they are not pressured to return to work earlier than needed, and implement proper support wherever necessary for a smooth return to work.
Provide Clear Paths to Advancement
25. Provide regular Continuing Professional Development opportunities for ALL employees. If an employee shows interest in upskilling, send them on a training course.
26. Don't punish or ignore competence, if an employee shows extra skillsets incorporate these into the remit of their role.
27. Have annual reviews with each employee with the view to a discussion about advancement within the company.
28. Offer regular leadership training to ALL employees. If your employees are worth keeping, you should be aiming to train everyone as if they will become the next great leader.
29. Show a clear roadmap for all employees of possible promotions available to them.
30. Make the most of the software and technology available, improve your transparency and accountability with dynamic ORG charts that show explicit roles and circles.
31. Promote from within!
32. If it's not possible to promote from within, allow those in roles closest to the new recruit to be a part of the hiring process. Even small actions such as organizing an office tour with them, or asking what characteristics and skills they think will be essential in the recruit.
Upskill Your Managers and Leaders
33. Send all managers on regular 'refresher' courses. Research shows that manager behaviors are getting worse over time and more employees are leaving because of their managers.
34. Discourage micro-management. No one likes micromanagement. Instead, encourage 'checklist and action' software. This way, managers and employees can input expectations and cross them off as completed. Therefore eliminating the need for constant progress updates.
35. Provide employees with support networks that aren't their line manager. If employees have people to talk with that aren't their manager, issues are likely to be brought to attention and resolved sooner.
36. Encourage feedback and regular check in's with all line managers.
37. Keep an eye on the employee retention statistics of each manager. A poor manager will have low retention and vice versa.
38. Leadership does not have to be an obscure topic, use this blog post about Samantha Slade's approach to leadership for tips.
Monitor Engagement and Employee Retention
39. Make the most of technology, it's there to help you, set up your employees with organizational software for as little as $3.90 per month.
40. Monitor productive employees to gain insight into WHY they are productive. These are your high achievers, make sure to keep them happy and acknowledge their hard work. Work out what's working for them and try to apply it to your low achievers.
41. Monitor unproductive employees to gain insight into WHY they aren't productive. Unproductive employees will bring down morale and productivity. You risk losing your high achievers as they will be discouraged by seeing low productivity being rewarded with the same benefits.
42. Send out employee satisfaction and engagement surveys to all employees. One of your best tools in anonymity, this is where you'll find out what the real issues are.
43. Encourage feedback at all levels. This will give you insight into engagement in areas not captured by surveys.
44. LISTEN to and ACT on employee feedback. The most important thing is to complete the feedback loop. If an issue is raised make sure you feedback to the employees on how it has been handled.
Going Forward, How to Improve
45. Find the 'pain point'. Every job has a pain point, this is the thing about the job that employees 'take home' with them. In some jobs, such as public services, it is more obvious than others. But EVERY job has one. Find the pain point for your industry and acknowledge it. Let your employees know that it is difficult and offer support and solutions.
46. At the moment especially, things are changing faster than we can keep track of. Use competent and user-friendly online platforms to allow employees access to all changes that may affect them. Store all policies, SOPS, business updates, and onboarding documents in one place.
47. Provide clear leadership in times of change. We do not like change and look to great leaders for support. Be aware that if mergers, lay off's, (or pandemics), are happening, you will need to increase your awareness of your support through leadership.
48. Address any issues of unfair or unethical behavior quickly, effectively, and transparently.
49. Proactively address any current issues that employees may raise questions about. For example, what is your brand's sustainability like? Do you have a large impact on climate change? Address these issues now, before they become too big to handle.
50. Be a positive role model and take notice of subordinates, even if you're the CEO. This is one of the most effective ways to make employees feel valued. Sit down with them and ask their opinions.
51. Revisit your retention strategy at least annually. Evaluate what has and hasn't worked and make sure to adjust accordingly.
52. Last but not least, conduct exit interviews. If your employee has decided to leave, make sure you find out why and if there was anything you could have done to prevent it. Allow the employee to choose who will conduct their interview out of the senior staff. It is important that they feel they can be honest and open at this stage.
Your Guide to Exit Interviews
A well-planned exit interview could be your key to unlocking how to increase employee retention. Ensure you have questions planned in advance.
Bear in mind that the employee is likely to be feeling emotionally charged and possibly defensive, make it clear that you are simply trying to understand their needs for use with future employees.
Here are 10 sure-fire questions that will enable you to conduct a successful exit interview.
- Why are you leaving?
- What is your new job offering you that we couldn't (only if they've declared new employment)
- How did you find your time with us?
- Were you satisfied with your job characteristics and was it what you expected?
- Did you feel adequately trained for the role you were in?
- How did you find your workload?
- What was your favorite thing about the job?
- What would you change about the job?
- Would you recommend us to a friend? Why/Why not?
- Is there anything we can do for you to consider changing your mind?
Anticipate the Challenges and Needs of 2021
If 2020 has shown anything, it is that flexible working IS possible. If your employee requests a day to work from home, or expresses that their commute makes them tired, listen to them.
When they are working from home, make sure they aren't working outside of working hours and make sure they aren't feeling the need to 'validate' how much work they are doing.
What makes employees happy? Being trusted and listened to.
2021 is going to be a year of uncertainty and changes, bear in mind that your employees may be feeling insecure about the future of their job. Wherever possible you need to reassure them that they DO add value to the company.
Furthermore, be prepared for an overall attitude shift, as much as we are all hoping to get back to normal life, be aware that we will be responding to the recession. Budget cuts are one of the best ways to shatter team morale so wherever possible make sure to look after employees to keep your workforce united and productive.
2021 is likely to be a volatile year, be prepared for business needs and priorities to shift and adapt accordingly. Embrace change and turn it to your advantage wherever possible to avoid being left behind.
Final Thoughts on How to Improve Employee Retention Rates
I think we can agree holding on to your star employees is important. But we're not always great at knowing how to improve our employee retention rate.
The key lies in keeping employees happy, engaged, and productive and these 52 steps should give you a clue as to how best to do that.
If you're ready to start writing your employee retention strategy? Grab a pen, or sign up to Holaspirit to document all your latest and best ideas.
It's time to get started:
- Work out WHY you have an issue with employee retention
- Work out HOW to change this using our 52 point plan
- Implement a strategy to increase engagement and create a loyal and productive workforce
If you found this useful, check out our website for our services available, and our blog for more tips like these!
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