Why does employee retention matter? Frequently hiring and training new employees can be a drag on productivity, and the morale of employees who stay on can also take a big hit.
It’s a growing concern for many businesses: One recent PwC survey found that 88% of executives reported higher-than-usual turnover.
Effective employee retention strategies generally boil down to listening to what employees need and finding ways to meet those needs. Powerful ways to increase employee retention include demonstrating an investment in your employees, making an effort to support their well-being, and finding opportunities for them to blossom.
Looking for ideas to improve your company’s employee retention rate? Here are five best practices for employee retention at your organization.
Benchmark Your Comp & Benefits Regularly
Reducing turnover and improving retention starts with the basics: competitive compensation and benefits and supportive working conditions.
Cool perks and a fun culture don’t matter if employees can’t pay their bills or seek medical care without worrying about going into debt. Focusing on these kinds of bells and whistles is one of the biggest retention mistakes employers make.
Employers across industries are gearing up to distribute higher pay increases in 2022. If your compensation packages aren’t competitive in the market, you risk losing talent to your competition. What are your competitors offering for similar roles? If current compensation isn’t competitive in the market, make a plan to raise salaries in 2022. Communicate that plan with employees and set realistic expectations.
Review your benefits package, too. Standard benefit offerings don’t get employees excited anymore, and a one-size-fits-all approach is bound to leave many feeling excluded. Consider implementing a customized flexible benefits plan or a cafeteria plan that allows employees to create their own benefits package. The more choices employees have, the more likely they are to stay with your company.
If you’re not sure what your employees would value most, conduct some research. Run frequent pulse surveys to measure employee attitudes toward changes you can implement quickly, such as greater flexibility in choosing when and where they work.
To capture bigger ideas in more detail, plan an annual engagement survey. This will help you spot points where engagement is deteriorating so that you can develop a strategy for improving employee retention.
Provide Clarity on Organizational and Individual Goals
Engagement is an essential component of an effective employee retention strategy. A clear sense of direction in daily tasks helps employees focus and remain engaged at work. Help employees find that clarity in their daily routine.
Implementing a goal alignment model can help employees gain a clearer sense of purpose. Goal alignment starts with an organizational strategy for driving big-picture results. Identify the company’s biggest priorities, and use those to direct individual objectives. If people know what the company’s overall priorities are, they can have a say in setting their own goals to help achieve them.
Collaborating with employees to set their own goals, aligned with strategic priorities, gives them a sense of purpose and a clear line of sight to big-picture objectives. Employees who feel invested and engaged in their daily tasks are much more likely to remain at your company.
Implement Continuous Performance Feedback
How does employee engagement affect retention? Employees who feel like they’re functioning in a vacuum are more likely to disengage — and are at higher risk for turnover. Managers need to maintain ongoing performance conversations to help employees stay engaged with their work.
Performance management practices have evolved in recent years, yet many companies still subscribe to an annual review process. In an increasingly remote or hybrid workplace, only communicating about performance once a year — or even once a quarter — isn’t enough.
Managers need to set a cadence of ongoing communication with their reports. Implementing scheduled one-on-ones helps managers set expectations and develop positive relationships with employees. If the only time a manager reaches out to an employee is when they’ve failed on some level, they’ll develop a negative relationship with their manager and become defensive. A toxic relationship between managers and employees is a key ingredient for high turnover.
Continuous feedback on a regular, consistent basis, on the other hand, helps employees develop a healthy relationship with their manager. They’ll feel more comfortable setting healthy personal boundaries on their workloads and asking for help when they need it. This improves the employee experience.
Most importantly, continuous feedback gives employees a better sense of their performance in the larger context, which fuels purpose and engagement.
Invest in Employee Learning and Development
Work occupies most of our waking hours. The prospect of staying in the same role for an indefinite amount of time can cause many people to become disengaged. Giving employees a clear line of sight to mobility within the company, on the other hand, can improve retention.
Employees at companies with high internal mobility stay almost twice as long with their employer as do their peers at companies with low internal mobility.
Invest time and resources into upskilling and developing your current workforce. Managers should work with learning and development leaders to design customized modules for each of their reports. Assembling potential courses or on-the-job learning opportunities helps employees see the scope of their options for professional development.
By sharing opportunities for growth and development with their reports, managers can give their reports a voice in where they go next.
Give Employees Ownership Over Their Own Growth
Employee retention tends to improve when employees are empowered to direct their own growth.
Help employees visualize their opportunities within the company. Implementing goal alignment software can help company leaders clarify opportunities for mobility. The software interface makes those opportunities transparent to the workforce.
But remember that mobility doesn’t have to only be stepping up on a linear path: It can also be a move into an entirely new department or team. Lateral moves can help employees find a place in the company where they can exercise their skills to the highest degree.
Talent assessments and individual performance data can help employees identify their strengths. HR professionals can help them match personal strengths and career goals with opportunities within the company.
If you can demonstrate that the company is invested in helping employees achieve their dreams, they’ll become more loyal — and stay longer.
You can’t “set and forget” your employee retention strategy. Like anything else in a volatile work climate, best practices for employee retention are subject to change. Keep up with trends outlining what employees are looking for from their job.
By implementing best practices for employee retention, your company signals its investment in employee well-being. Stay in touch with employee needs and take concrete action to improve the employee experience. Then, watch employee retention rates rise over time.
Download: The 4 Ways to Improve Employee Retention Whitepaper