The cost of losing an employee is clear. Productivity drops, customer satisfaction suffers and recruiting costs go up. That's not to mention the time and resources that go into training a replacement. According to a 2019 report from Paycor, employee turnover cost businesses $600 billion in 2018. This year the loss is expected to exceed $680 billion, and that’s not even counting the effect COVID-19 had on employee retention.
Employee retention is a major problem for businesses and it can’t be solved by simply offering perks like gym memberships or a company game room. Here are five key things companies can do to increase employee retention.
Flexibility in the Workplace Improves Retention
The flexible workplace is a part of the new normal since the COVID-19 crisis altered the business landscape, and it doesn’t appear to be going anywhere. Flexibility typically refers to a range of things, including working remotely, flexible scheduling, part-time scheduling and a hybrid approach.
According to a survey of 3,500 business decision-makers, SMB owners and employees conducted by research firm Azurite Consulting, the ability to work remotely during the crisis improved work-life balance as well as the mental health of employees and their employers. Employees were able to spend more time with their families and 68% of employees reported they were able to work as efficiently, if not more efficiently, remotely.
“While there are certain positions that will have to be done on-site, the ability to have flexibility and choice is extremely important now," said Lachandra Baker, senior manager of employee engagement for Columbus, Ohio-based CoverMyMeds. "Many companies are realizing that they must have a strong employee value proposition to survive the multitude of business and societal challenges. Those who are adaptable and innovative will thrive. Those who are not, will cease to exist.”
Business as usual is a thing of the past, Baker said, and the changing dynamics will test companies' ability to adapt. "To advance to the next level and guarantee endurance will ultimately depend on how we treat our employees and how much we can contribute to their overall growth, development and sense of purpose,” she said.
Related Article: Will Flexibility Survive the Return to the Workplace
Positive Company Culture Increases Retention
Growth opportunities are not enough. Company culture looms large in retention efforts, particularly for younger workers. Workers want to enjoy the work they do, the people they work with and believe in the company's mission, Baker said. In her company, each employee plays a role and they are recognized for their efforts.
“I equate the importance of company culture to that of a romantic relationship," she said. "It’s vital to have a balanced give-and-take aspect. Trust, respect and appreciation are all necessary to produce the best relationship possible.”
Jeff Kortes, author and a frequent speaker on employee retention issues, emphasizes the mantra, “Give Your Employees C.R.A.P.” That is: caring, respect, appreciation and praise. Employees that feel valued are more loyal, engaged, productive, satisfied and likely to stick around.
“They're not just employees," he said. "They're people and when you get to know people instead of employees something special happens.”
A recent report from Limeade, an employee experience platform company, reported that only 31% of 1,000 employees surveyed strongly agreed the company they work for cares about them as individuals and 33% have left a job as a result. Company leadership plays the primary role in cultivating a culture of empathy and trust.
“People do not quit people, they quit nameless faceless organizations," Kortes said. "You've got to get out there and talk to your people.” Visibility drives communication, which drives trust and trust drives loyalty, he added.
Company culture doesn’t go into suspended animation during a crisis. In fact, it’s even more vital to focus on it especially for remote workers, said Lotus Felix, founder of content marketing agency Flawless Content Shop. Many remote workers are losing the emotional connection with the companies they work for. For Felix, this is a significant concern because many high-value employees are "opting for passion and the mental nourishment they savor from their roles over the paycheck or economic nourishment."
Companies can reinforce the social bonds that connect their distributed teams through virtual spaces, dedicated chat rooms, and game rooms where employees can socialize, Felix said. Another way his company encourages retention is by sending food or snacks to employee work stations or to homes in the case of remote workers.
Jen Wells, digital and emerging tech talent connector at Ohio-based TalentID Group, said recruiting top talent is not enough. If an employee doesn’t stay, the business is back to square one. Sharing the organization’s core values and being clear about what sets it apart from other potential employers makes a business more likely to find employees who will thrive in, and stay with the organization.
Related Article: How to Maintain a Strong Corporate Culture During a Downturn
Don’t Forget the Onboarding Process
The factors that influence employee retention begin at the start, all the way from attracting those employees through the onboarding process and on through developmental training.
“Companies overlook the full recruiting experience from attracting, hiring, onboarding and engaging talent," Wells said. "While you can focus on attracting employees, if you don’t have the right hiring practices in place, you won’t be able to hire the right folks. If you don’t have clearly defined onboarding processes, you risk losing employees by making them feel undervalued before they even begin.”
The onboarding process allows new employees to become familiar with what will be expected of them, their daily routine, the atmosphere of the company, the technology and software they will be using, the work environment itself and how staff relates to one another. This basic socialization process is when a new employee gets their first taste of the company culture from the inside and sets the tone for their future.
According to statistics from VantageCircle, a provider of rewards, recognition and feedback services, 69% of employees that go through an effective onboarding process are more likely to be retained for at least three years and 58% are more likely to be retained for longer.
The digitization of the process has been vital to the process of hiring remote and distributed workers. It also had the effect of dehumanizing the process and making it seem sterile. Though many elements of the onboarding process can be automated, a business may need to increase the amount of personal communication and interaction for remote workers.
An efficient onboarding process should not come at the expense of a positive, engaging personal experience for the new employee. Leaders and those involved in the onboarding process need to remember to communicate with prospects and new hires. Ineffective communication creates uncertainty, anxiety and a lack of control. Many prospective employees already find the process of applying for and beginning a new job nerve-wracking, especially in today’s climate. Consistent communication throughout the onboarding process leads to a more positive employee experience.
Related Article: A Plan to Keep Remote Workers Engaged
Provide Positive Reinforcement for Retention
Benefits such as extra vacation time, retention bonuses and other benefit plan features such as stock options linked to longevity with the company encourage loyalty and retention. They also give employees something to look forward to as they gain seniority. Other perks that show appreciation for seniority include free chiropractic care, monthly movie tickets and yearly Amazon Prime memberships.
“If they feel taken care of and appreciated, they will be more apt to give their time, talent and treasure to advance your business," said Baker of CoverMyMeds. "If a company fails to help its staff feel valued, respected and supported, the odds of them leaving grows astronomically.”
Positive reinforcement doesn’t have to come from tangibles either. It can be personal acknowledgment of a job well done or kudos in a meeting with other employees. Sincerity and specificity are key, as employees want to know what they did to merit acknowledgment.
It also helps when leadership recognizes the strengths of an employee and helps them work on their problem areas by remembering which projects they excelled at and those they didn’t. Engaging them in conversations is critical but it's important that not every conversation relate to performance and evaluation, or even the business itself.
By recognizing and appreciating individuals, leaders show they value each employee for their differences, not in spite of them. An employee that knows they are appreciated is an employee more likely to feel a higher level of personal satisfaction and loyalty.
Related Article: Recognizing the Signs of Disengaged Employees
Ongoing Learning Initiatives Encourage Employee Retention
Offering opportunities for learning and growth is hugely important to retention, said Benjamin Granger, senior principal at Qualtric’s XM Institute and an employee experience and customer experience evangelist.
His company's recent global engagement trends report identified learning and development as the most impactful driver of intention to stay with a company. Employees want to see a future for themselves in a business, but that doesn't necessarily mean a formal path or progression.
"When we run organizational surveys, what we often hear is that employees are interested in things like stretch projects with other groups/departments, lateral moves, working on special project teams," Granger said. "It could also be specific training on areas that they are interested in improving such as their public speaking skills [or] their proficiency with certain applications."
Ongoing learning initiatives are not just important to millennials and Gen Z. Research conducted by TalentLMS and Ashley Prisant from Harvard University indicated 36% of managers stay with their current employer because of training opportunities they were offered. Sufficient training and development opportunities are vital for the retention of all employees, not only those at lower pay grades.
Another report from TalentLMS showed that more businesses are recognizing the value of reskilling and upskilling, with 42% of companies increasing their efforts since the COVID crisis began. These businesses see this training as a benefit to employees that also improves the overall company culture, and 42% offer it because it increases employee retention. Of those employees who were polled, 74% of those who had not received any upskilling or reskilling training indicated they would prefer to work for a company that does.
“Show your people you're interested in their development and that you're counting on them in the long run. Let them thrive by providing them resources to become experts in their fields, and they'll show gratitude and loyalty," said Ana Casic from TalentLMS.
Retaining the talented people they have worked so hard to hire is a vital concern to businesses in today’s unstable economic climate. Many are struggling to remain profitable and cannot afford to hire and train new employees. By providing a flexible workplace, encouraging a positive company culture, providing an effective and personalized onboarding process, giving positive reinforcement for longevity in the workplace and providing ongoing learning, businesses can increase employee retention while improving the overall employee experience.