In an article he contributed to LinkedIn entitled "Employee Retention Now a Big Issue: Why the Tide has Turned," Josh Bersin, principal and founder of Bersin by Deloitte writes: "Many studies show that the total cost of losing an employee can range from tens of thousands of dollars to 1.5-2X annual salary." As a result of this climbing number in employee turnover, a number of companies are even designing their business around high-turnover—believe it or not.
As you can imagine, this isn't the best business strategy to have. Especially for organizations that want to keep costs down, employees happy, and of course, contribute to the competitive advantage of the business. So, instead of preparing your business for a high-turnover, why not work on designing your business around retention?
Improving employee retention before the exit interview
Waiting until disaster hits to come up with a plan for damage control is a huge issue in operational planning today. This approach can be detrimental to the business as it's often too little too late to gain control of the issue. Take your employee's exit interview, for example. At this point, it's likely that you and your employee aren't on the best of terms and if you try to re-engage him or her they will be reluctant to change their mind.
While exit interviews serve as an opportunity to gain valuable insights into their experience, why wait until they are on their way out the door to gain this information? A viable alternative approach to this would be to schedule monthly meetings with the members of your team to check in individually and gauge satisfaction and levels of productivity.
Retention starts before recruiting
Do you want your employees in for the long haul? Of course you do. While this is often easier said than done, especially for a company with a reputation of high-turnover, there are proper steps you can take from the beginning to improve your approach. If your retention strategy begins once you hire the employee, for example, take a step back and start improving your process at the root of recruiting. This includes establishing or revising your company culture, the way you attract employees to available positions and revisiting all job descriptions.
Once you have done so, it's important to also review your interview strategy, and ask yourself if you're misleading any of your potential candidates into a position that is flawed. Say, for example, you plan on hiring an account manager; once you recruit, interview and hire the candidate, don't immediately assign them to a project that requires damage control. Instead, have a welcome strategy in place, immerse your new hire into the company culture and assign someone to spend some time showing them the ropes. From there, your new hire can gradually take on new projects, preferably ones that are not established with one of your existing account managers.
Provide opportunities for skill development
In a competitive business environment, it's likely that your employees are going to have a desire to look for new ways to challenge the status quo and contribute to your competitive advantage. But if they lack the skills to do so, your team and your business are likely to become stagnant. To improve retention offer clear paths for advancement. When your employees are made aware of the opportunities available to them, they're likely to feel valued and thus envision a future with you. In fact, "[b]y investing the appropriate training in an employee, they will develop a greater sense of self-worth as they become more valuable to the company, writes the staff at Training magazine. "The company, too, will gain specific benefits from training and developing its workers, including increased productivity, reduced employee turnover, and decreased need for constant supervision."
To help decrease employee turnover and improve overall satisfaction, start with a training-needs analysis to see where the void needs to be filled. From there you can design or adopt a program that best fits your business and individual needs.
Harness the power of working remotely
As Greg Digneo reports in this article for TimeDoctor, "remote workers are more productive, more willing to work overtime, and best of all—more likely to stay with your company longer."
Yeah, you read that right: you can use remote working as an employee retention tool, in addition to the proven cost saving of telecommuting, even part-time.
Pay your employees well and offer competitive benefits
A competitive salary and benefits can go a long way, but they are not the only effort you should pursue to retain your employees. Bersin continues: "Compensation plays a role, but not as much as you may think. All the experience we have shows that for mid-performing people compensation is a "hygiene" factor - too little money will definitely create high churn, but over compensating people won't make up for a poor work environment." To find a happy medium, give your employees what they deserve. This includes a salary and incentives based on experience and performance, in addition to the opportunities we shared with you above. In doing so, you'll notice a clear difference in the number of engaged employees, as well as a decline in turnover.