What is employee retention?

Employee retention means keeping your employees for the long term. The employees who stay committed to your company are generally happy, dedicated, hard-working people who have no outside interest in seeking other job opportunities. Employee retention rates are higher in companies where management consistently maintains a positive work environment. Although, the rates can vary between companies and industries for reasons ranging from an employee feeling disrespected or undervalued to bad management or low compensation. Whatever the reason, one thing remains the same—employee retention highly contributes to a business’s overall productivity, performance, and bottom line.

What is employee turnover?

Employee turnover is the total number of employees who leave an organization over a fixed time period. There are two types of turnover—voluntary and involuntary. Voluntary turnover refers to those who willingly leave their jobs for personal reasons, like returning to school, starting a new job or retirement. Involuntary turnover refers to those who are laid off because of things like seasonal work ending or downsizing of the company or their employment termination because of performance or behaviour issues.

How does employee turnover affect the business financially?

Employee turnover has a negative financial impact on the business because of the costs involved in recruiting, hiring, and training a replacement employee. Not to mention the overtime costs associated with employees who temporarily step in to fill the vacant position. On average, one lost employee can actually cost the company 6 to 9 months of salary. This is why implementing an actionable employee retention strategy is so important.

Why do good employees leave?

People can leave the company for a variety of reasons. Performing exit interviews before they can offer some invaluable insight into why good employees leave. When done properly, exit interviews are a great tool for getting your employees’ perspectives of the company. They can help you determine whether your employee retention strategies need work. The most common reasons employees give for leaving their jobs are:

• Feeling unsupported
• Overworked
• Salary and/or benefits
• Insufficient work/life balance
• Boredom
• Not happy with management
• Feeling unrecognized
• Limited career advancement
• Dissatisfied with company culture
• Feeling discouraged and/or held back
• Micromanagement
• Worried about the company’s stability/financial health
• Time for a change
• They want a more desirable opportunity

How to implement an actionable employee retention strategy

If you’re looking to keep top talent in your workplace, you need to have a good employee retention strategy in place. Here are 10 things you can do to boost your employees’ company morale and increase your odds of retaining those valuable employees.

1. Orientation and onboarding

Set your employee up for success right from the start. Use the onboarding process not only for welcoming your new recruits but as an opportunity for teaching them about the necessities of the job, as well as company culture and how they can fit in and thrive. Many businesses skip this step, which can have long-term adverse effects on your new employees. Offering full support, thorough training, and professional growth opportunities is an investment you can’t afford to miss. How you treat your employee from day one can set the tone for how long they last.

2. Offer mentorship

Extend your onboarding process by giving new employees a trusted mentor. This is especially helpful in a remote work setting. Ask your mentors to help new employees feel welcome and have them offer support, guidance, and structure. Mentorship programs can be an asset for the entire company—new employees can learn everything they need from someone who was once in their shoes, and experienced employees can see things through a fresh set of eyes. Pairing mentors with both new employees and existing staff can promote increased job satisfaction and performance.

3. Be flexible

If you want your company to stand out from the competition, offer a flexible schedule. Not only will this be an incentive for new recruits, but it can also help re-engage current employees and boost company morale. The newest trend in the job market is people wanting more flexible working options. Recent studies show 40% of workers would sooner quit their jobs than return to the workplace full time. If the days of being happy working a 9 to 5 job are over, decrease the chances of employee turnover by considering compressed workweeks, partial telecommuting options, remote, hybrid or flexible schedules.

4. Competitive compensation

An important part of employee retention is offering competitive compensation. Perform employee evaluations regularly and adjust salaries when needed. If your company can’t increase wages, consider offering other forms of compensation like bonuses, commissions, improving health benefits, or adding an RRSP or retirement plan. Offering a little extra can go a long way toward feeling appreciated.

5. Encourage Communication

The ability to communicate openly, honestly and respectively is integral to employee retention. Your employees should never feel afraid, intimidated, or ashamed to ask questions, give ideas, or speak their minds about their concerns. Your leaders should be well-trained in promoting regular, positive communication across the organization. This is especially important for remote and hybrid workers who may feel left out of what’s happening on site. Every member of your team needs to feel important, so all managers and team leaders should proactively reach out and check-in. There are a few things you, or your management team, can ask to start a casual conversation:

• How the employee is doing both personally and professionally
• If they need anything
• How they’re handling their workload
• If they’re happy/satisfied with the way things currently are on the job

6. Offer wellness programs

Show support for your employees’ physical, mental, and financial health by offering programs that can help prioritize their wellbeing. Stress management courses, gym or fitness memberships, or retirement planning services are a great way to show them you care about their health.

7. Regular feedback

The best way to encourage growth is to offer regular feedback. Instead of performing yearly reviews, many employers choose to meet with their employees one-on-one regularly to offer constructive feedback, discuss short- and long-term goals for both the employee and the company, and help give them direction on their future with the company. A major benefit of regular feedback is being able to point out all the good the employee does for the company. This is a huge confidence booster and should never go unnoticed. And waiting a year to tell them so, just doesn’t cut it anymore.

The same goes for constructive criticism. If an employee is regularly making mistakes or has some areas of concern, address it with them immediately so they can learn how to correct the action or behaviour.

8. Professional growth

Identifying areas for professional growth can help your employees gain skills essential for company growth. As technology is becoming more prominent across many industries, the way work gets done is also changing. Make upskilling a part of your employee retention strategy wherever possible. Your employees will be ready for a smooth transition as your business requirements change. Investing in online courses, physical or virtual conferences or offering reimbursement for continuing education are all ways you can support professional growth.

9. Show appreciation

It’s natural for people to want to feel appreciated when they do things for others. The same rule applies in the workplace. When you truly value and appreciate your employees, they’ll want to do more in return. When’s the last time you said “thank you” for all the small things your employees do? Unappreciated employees are often unhappy ones.

Gratitude is another major part of employee retention. Regardless of how big or small, reaching a company milestone requires a team effort and is a reason to celebrate. The same applies to your employees’ anniversaries within the company—1 year, 5, 10, 15—that’s all the time they’ve dedicated to you and the company. Let them know how much you appreciate them and the work they do.