High attrition hurts a company’s bottom line. Experts estimate that finding and training a replacement costs upwards of twice an employee’s salary. And churn can damage morale among remaining staff too.
Despite increasingly high turnover and the trend to replace employees with consultants on an “as needed” basis, organizations must still hang on to their best performers for their important permanent positions. But with more and more people working for themselves, or experimenting with different careers and employers, retention is becoming challenging.
One of the main ways to keep hold of good staff is to instill a sense of loyalty and commitment. Here are some ideas to achieve this:
1. Hiring the right people from the start is the single best way to reduce employee turnover. Interview and pick candidates carefully, not just to ensure they have the right skills, but also to check whether they fit in well with the company’s culture, managers and employees.
2. Set the right compensation and benefits package, work with specialist recruitment firms to obtain current data on industry pay levels and get creative when necessary with benefits, flexible work schedules and bonuses. Brainstorm and ask staff for their ideas on reward/bonus systems. Rewards need not entail cash bonuses, but may include benefits such as child crèches, flexible hours, time off, payment of professional association fees, etc.
3. Pay attention to employees’ personal needs and offer more flexibility where you can. Consider offering telecommuting, if the type of work permits. Consider allowing them one or two days a week of working from home.
4. Bolster employees’ engagement. They need social interaction and a rewarding work environment. They need respect and recognition from managers, and a challenging position with room to learn and move up.
5. Managers often overlook how important a positive work environment is, and how far meaningful recognition and praise from managers can go to achieve that. Awards and praise might just be the single most cost-effective way to maintain a happy, productive workforce. Show an active interest in your employees’ welfare and enjoyment – don’t wait until the annual review.
6. Simple e-mails of praise at the completion of a project, monthly memos outlining team achievements to the wider division and peer-recognition programs all inject positive feedback into a workforce. Also, consider reporting accomplishments up the chain. Copying senior managers into a thank-you e-mail means the message is even more effective. To make it easier to identify accomplishments, ask your team for weekly or monthly updates of their achievements. Ask for specific numbers: examples or e-mails of praise from co-workers or customers.
7. Outline challenging, clear career paths. Employees want to know where they could be headed and how they can get there. Annual or mid-year reviews are obvious occasions for these discussions, but you should also encourage workers to come to you with career questions throughout the year.
8. Keep an ear to the ground; don’t wait until disgruntled staff come to you because by then, much damage has already been done. Whether the problem is at an individual level or involves an entire department, act quickly and be seen to be taking steps to rectify any issues. Consult with all levels of staff. Encourage management to take weekly walks around departments, letting their presence be known, asking friendly questions, showing concern and taking steps to solve problems.
9. If the job opening you are offering is potentially a short-term arrangement, or likely to change or disappear in the future, be open and honest about it. Never mislead employees. Remember many people think of their company as an extension of their family. Treat them as you would a valued family member and you will have life-long loyalty. Treat them as a number, a disposable commodity, and you will have nothing.
10. Final thought: listen, listen, listen. Money is one of the least common reasons for turnover (lower-pay positions are sometimes exceptions), so if you are experiencing high turnover, throwing cash at the problem will not make it go away (although it might hide it for a while). Debrief former employees to find out why they left. If you continue to allow staff to quit without any efforts to stop the defections, you effectively create a culture that becomes the norm in your business.
Simon Boulton is the director of Aequalis Consulting.