Employee Retention: Strategies for Retaining Top Talent
One of the best business practices is making sure to take care of your employees so they stay with your company. This is where employee retention strategies play a vital role. Let’s discuss what these strategies are and how they can help you keep your top talents.
Employee turnover is expensive. This means that the rate at which employees leave your company impacts budgeting and overall operation. When an employee leaves, you pay exit costs and incur added costs to hire new employees. Aside from the financial tolls, you will also face time-related costs such as knowledge transition, onboarding, and training.
Moreover, incidental costs may also occur when the resignation leaves lower morale and impacts productivity negatively. Outside of cost, a high employee turnover rate can sometimes be an indicator of poor business management. This means that you are giving your employees reasons to leave or generally not keeping them happy at work.
Research shows that a tsunami of employee turnover will impact many businesses after the COVID-19 pandemic. One of the reasons mentioned is many employees are staying only out of necessity; they need the job and will hop on to another company when everything gets better.
Realistically speaking, the bottom line of the decision to leave is upon the employees themselves. However, as an entrepreneur, you can’t afford to lose the key players that contribute significantly to your business. You can sail the possible waves of turnovers when you have employee retention strategies in place. In this article, we’ll discuss the strategies you can use and how these strategies benefit your business and employees.
What is Employee Retention?
In essence, employee retention is a company’s capability to keep its employees. One part of it is tracking the retention and turnover. This part is concerned with data relating to the rate at which employees are retained or replaced. On the other hand, part of the employee retention is the company’s action based on the said data. This includes solutions and strategies that aid the retention rates at a healthy number.
Now, what is this healthy number? It is recommended to keep your retention rate high. This means that there is a commendable length of stay of employees over a period of time. Also, the rate can be defined mathematically as the difference of the total number of employees and the number of employees that left divided by the total number of employees or as stated in the formula:
Employee Retention Rate = (Total number of employees - Number of employees that left)/Total number of employees
If this rate continues to be high, it means that the company is taking good care of their employees’ needs. More importantly, a high employee retention rate actually yields multiple benefits for the company. So, business owners are encouraged to retain their business’ top talents.
Here are some benefits of a high employee retention rate:
- Reduced costs. We highlighted that employee turnover is expensive . That said, employee retention warrants its opposite and actually reduces extra costs. If employees are happy, the cost of turnover is reduced.
- Consistent productivity. Because you retain the people who have been working on the business processes, there’s no turnover that will impact productivity. New hires would require a learning curve and that takes time. This is avoidable when you retain employees.
- Improved morale and culture. One of the most dismissed elements in teamwork is chemistry between team members. This connection is important for productivity and culture. When employees leave, connections are lost and sometimes the workload is passed on to the remaining ones. Retaining productive team players produces continuous motivation and enlivens a healthier company culture.
These are just a few of the many advantages of employee retention. With such gain, companies continue to up their game in the field. To do so, companies implement certain strategies to keep the retention rate at higher scale.
Let’s move on to the best practices in employee retention.
Employee Retention Strategies to Keep Top Talents
Whether it’s in marketing, operations, or sales, there are strategies that apply to ensure a positive return. That said, employee retention is not an exception. Here are the following relevant strategies to retaining your company’s top talents.
1. Clear and Open Communication
We can’t highlight this enough but communication in business is extremely important. Upon employee onboarding, it is essential to set clear expectations to avoid any confusion in the job role. Instructions and task delegations should also be delivered coherently to set proper objectives and goals. Moreover, be transparent with your business’ status to assure your employees of their future with your company.
But beyond rolling out company policies and instructions on tasks, a company should also practice open communication. Business leaders should foster an environment where employees have a voice. This should create an opportunity for the employees to provide feedback without feeling intimidated. Through this, your top talents will feel that they are heard and you’re reaching out at a human level. A company that exhibits best communication practices will see an improved culture.
2. Professional Development Opportunities
Human as we are, we will always look for the next big thing. It’s no different with navigating through our careers; employees will always look for opportunities to grow and thrive wherever they are.
Sometimes, being stuck on the same tasks and not doing anything new drives an employee away. As a business owner, you should commit to activities that will help in your employees’ development. Provide skill-based training. Promote your top performers. Instill opportunities for knowledge growth. These are some of the things that you can do to recognize their efforts and care about their career growth. Employee development improves their task proficiency and enhances their work quality.
3. Compensate Reasonably
Compensation is a major factor in retaining or hiring top talent. It’s not necessarily the deciding factor but it does say something about a company’s willingness to invest. Overall, you should pay your top-performing employees with respect to their experience and value they add to your organization.
4. Offer Competent Benefits
Generally, perks and benefits attract employees to stay with your company. Apart from a competent salary, basic benefits like health insurance or regular bonuses play a pivotal role in retaining talents. Paid leaves are also a top priority on why employees stay.
For example, some businesses assure a raise when an employee reaches a specific duration with the company. Another approach is to offer referral bonuses to employees who help onboard more talents to your organization. Regardless, these perks should be competent enough to set you apart from the competition.
5. Recognition and Reward
While a reasonable salary and competent benefits package provide assurance, recognition fills the heart. When employees perform beyond expectations or exceed quotas, you must devise a rewards program that recognizes their efforts. This speaks a lot on how you value their contributions to your organization.
You may also incentivize certain activities to promote a healthy competition among your employees. For example, you can reward the employee with the most referrals or recognize those who haven’t missed their reports. The key here is making top performers feel appreciated for their hard work.
6. Flexible Work Arrangements
This luxury is not something that all companies can have. Some natures of work deal with being in the front-line attending to customers. However, there are certain professions that don’t really require the typical 9-to-5 work days.
Even before the COVID-19 pandemic, many companies have already applied the work-from-home setup. For deliverable-based industries like software development or digital marketing, this is very much achievable. Of course, technology makes this possible through cutting-edge communication tools that make work easier. This is even more of a reason to consider such a setup.
If that’s a bit too far, you can offer flexible work hours for your employees. For example, they can extend for a few hours on a certain day so the rest of the days are shorter. Another thing is to allow them to distribute their hours within the day.
7. Promote Work-Life Balance
At the end of the day, work is work. The belief that employees should dedicate their lives for work is obsolete. It paints a bad picture of your company and you as an employer. To avoid this, you should understand that your employees have lives outside of work. And, they have every right to enjoy it. You may even encourage your employees to leverage their vacation benefits. Creating a balanced environment for your employees results in job satisfaction.
In summary, as long as you keep your employees happy by setting realistic objectives that put their needs as a priority, your retention rate will remain healthy.
If you want more tips on employee handling and running your startup, you have come to the right place. Our Full Scale blog has countless startup-related topics where we share tips and tricks in elevating the way you do business. Matt DeCoursey and Matt Watson co-founded Full Scale to help entrepreneurs with software services fast and affordably. While doing so, they continue to uplift the startup community in Kansas City, Missouri with their guidance and expertise in the field.
We offer software development services for your software needs. Our pool of software developers, managers, testers, and technical writers is fully equipped to provide the best service for you. Visit our website or contact us today and get a free consultation.