Employee retention strategy is a business plan that employers implement to reduce turnover and enhance workplace morale.
What is Employee Retention Strategy?
An employee retention strategy is critical for an organization, considering employees are a business's most valuable asset. A strategy will ensure employers retain talented and high-performing staff members that want to make a positive difference for the company. In turn, business operations will run more productively, employees will be more engaged, and the company culture will thrive.
Additionally, the cost of employee turnover can significantly impact a business's bottom line. Case studies show that depending on the position of the employee, turnover can amount to 2.5 times their salary. With a strong employee retention strategy, managers can mitigate these costs and maximize their profit margins.
7 Tips for an Effective Employee Retention Strategy
According to statistics, 61% of retail businesses cite that their biggest challenge is customer retention. It was also discovered that 3 million people in the United States quit their jobs to find better employment. The issue of retention can oftentimes stem from company culture and leadership. To ensure that businesses are creating a valuable workplace for their employees, employers should use the following best practices.
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Employees are more likely to enjoy their workplace, knowing that they are being paid fairly and competitively in their region and industry. In fact, studies show that the top reason why 45% of employees quit is because of their salary. Additionally, the following factors that result in high turnover are better advancement opportunities, benefits, and location. A study highlights that 56% of employees say health care and insurance eligibility also drives them to stay at their job.
2. Start by Hiring the Right Person
Employers can begin strengthening their retention rates by hiring motivated and experienced employees from the start. This entails making sure that potential hires are interested in building their career with the organization. Hiring managers should also make sure to be transparent during the application and interview process. This is important, considering 37% of hiring managers say that new employees are more likely to stay with a company longer if they were more informed during the hiring process.
3. Communicate with Employees
Having honest and transparent communication with employees will reveal pain points and how the company can remedy them. Employers can send out anonymous surveys, ask for feedback, or pay attention to trends in the workplace. These insights will showcase what employees are worried about or frustrated about. Employers can then take the appropriate steps to alleviate these issues.
4. Be a Leader
Managers and higher-level executives of a business should present themselves as leaders. Rather than just be known for delegating tasks, these individuals should demonstrate effective leadership skills. These qualities include being available for employees to discuss feedback, providing organizational structure, and having accountability.
5. Train Management Teams
Oftentimes, employees will leave their jobs because of poor management teams. Employers need to make sure that managers are well-trained and that they have the necessary people skills to oversee employees. Some soft skills managers should have include conflict management, communication, and stress management.
6. Promote Employee Engagement
Engaged employees are more likely to enjoy their job and work productively. Business owners can boost engagement by offering growth and learning opportunities. For example, companies can provide in-office skills-building workshops or fund employee tuition. The workplace should also allow employees to advance their careers via promotions or leadership roles.
7. Build the Company Reputation
Organizations should present themselves as a business that people want to work at and are proud of being employed by. In today's modern world, companies can build their reputation by giving and donating to charities and non-profit organizations. They can also contribute and help local communities thrive or take a stand for social and environmental issues. Businesses may also boost their brand as an employer by highlighting their emphasis on work-life balance, mental health, and team-building.
Key Takeaways for Employee Retention Strategy
Employee retention strategies are plans that employers use to lower turnover rates and boost workplace morale.
Having an employee retention plan will also help organizations significantly cut costs and protect their bottom line.
According to statistics, employee retention is a top concern for employers.
Some strategies to retain employees include providing competitive salaries, communicating with staff, and promoting engagement.