Nobody wants to work at a revolving door organization. Staff retention should be a concern for all employers, not only from a cost standpoint but also for the positive impact it has on employee morale and engagement.
Looking from a purely cost-driven standpoint, the numbers speak for themselves. In a frequently-cited paper, the Center for American Progress has estimated that the direct cost of turnover may range from an average of 10 to 30 percent of an employee’s annual salary to as high as a whopping 213 percent for very highly paid positions!
Indirect costs may include lost productivity, lost client relationships, lost client revenues, lost institutional knowledge and deterioration of employee morale.
Ways to Improve Employee Retention Rate
So, it’s clear that improving employee retention is a smart management strategy. Following are some ways to do that.
- Hire the right people: Before you worry about retention, it’s important to hire the person who is the best fit for the position. In addition to specific job requirements, look for staff who are the right cultural fit for your organization.
- Understand what prospective employees are looking for: There are generational differences that may have an impact on how attractive your company is to the best employees. For some, it’s flexibility such as job sharing, telecommuting or flexible scheduling. Others may be driven more by salary, benefits and paid time off. One size doesn’t fit all and it’s important to identify local market and industry trends to be competitive.
- Competitive wages and benefits: For the most part, a flexible workplace won’t offset a poorly designed compensation package. Annual reviews of compensation comparability in your market and industry are important in your planning. Trust your instincts as well. Generally, a combination of market-level or better wages, benefits, paid time off and flexibility can have a significant effect on improved retention (and, of course, on your recruitment efforts!).
- Create detailed position descriptions: Candidates should be able to review the responsibilities and requirements of the position they are considering. And, once they have been hired, these should serve as benchmarks for their performance.
- Develop a structured onboarding process: Few things are more disappointing to new hires than to arrive on the first day to see that no one has thought about their responsibilities, the training they require or even how to explain company policies.
- Create a supportive organization: No matter what the position or type of business, a primary reason cited by departing employees is the difficult relationship they had with their manager. Creating the right environment may include demonstrating respect for employees, creating career paths with training opportunities, providing managerial training, planning employee recognition programs and communicating consistently with employees.
Benefits of Following These Steps
There are certainly other programs that can and should be put in place, but an organization that starts with these steps should find that their employees are more satisfied, stay longer and, in the end, create a more harmonious work environment and better customer service.