7 Elements of a Solid Employee Retention Plan
Did you know that replacing an employee costs six to nine months of their yearly salary? You’ve invested time, money, and energy into training your employee, and you have to do it all over again now that they’ve left.
When you hire an employee, you make an investment. The more you set your employees up for success and treat them well, the longer they will stay at your company, and the more this investment will make your entire organization successful. That’s why it’s a real challenge when someone chooses to leave.
Employees are one of the most important investments a business can make. How can you make the relationship successful?
Planning improves employee retention
While you might have an idea of why your employee left, you want to prevent it from happening again. That’s where a carefully crafted employee retention plan can make a big difference.
To encourage employees to stay, you need an employee retention plan that incorporates the following seven elements.
1. Calculate Turnover Rates and Audit Your Current Employee Retention Plan
Start by calculating your employee turnover rate. How often do you hire new people, and how long do they work for you? To calculate your annual turnover rate, add the number of employees who worked for you at the beginning of the year and how many employees you had at the end, then divide by two. For example, if you had 100 employees on January 1st and 120 on December 31st, use (100+120)/2=110.
Now, divide how many employees departed your company by this number. If 30 people quit during the year, then it would be 30/110. Multiply by 100 to get the percentage, and you have an annual turnover rate of 27.27%.
If this rate is higher than you’d like, audit your current employee retention strategies to find out what is and isn’t working. Take a look at:
- How engaged your employees are
- What compensation and benefits you provide
- Your workplace culture
- Employees’ work-life balance
- Your communication strategies
And more. If any of these drive employees away, then you have identified which problems need fixing.
Employee retention starts from the hiring phase
2. Start at the Beginning with Recruitment
Employee retention starts at recruitment. Set hirees up for success with proper training, so they aren’t confused about their jobs. Initiate team bonding activities to encourage everyone to get along. Your onboarding process should not only introduce new employees to their roles, but to the broader workplace culture that will set the stage for their time at your company. Make a point of recruiting people whose personalities mesh with your existing culture.
Employees are motivated when they have the flexibility to balance work and home
3. Understand Work-Life Balance
It goes without saying that work isn’t everything and many people wish it occupied much less of their time. While striking the right balance between work and home life is an ongoing process, if you work towards it your employees will be happier, healthier and more productive. That means enabling flexible schedules for your employees will encourage them to stay at your company and motivate them.
Don’t overwhelm your employees. Stress does not inspire them to work harder or faster. Instead, offer flexible hours, paid vacation time, and work-from-home options, so your employees don’t feel that work needs to come before their family or social lives.
4. Offer Generous Compensation and Benefits Packages
Employees are more likely to stay at your company if they don’t feel the need to seek higher compensation elsewhere. CEO of Ballard’s Gravity Payments, Dan Price, announced in 2015 that he would raise his company’s minimum wage to $70,000 per year. Doing so provided all of his employees with financial stability and benefited their lives outside of work. One employee, Ryan Pirkle, says:
There’s this energy in this building and the company and for some reason I don’t see myself here in one or two years — I see myself five years, ten years. It made me feel like I was taking roots.
Ballard’s Gravity Payments witnessed an increase in productivity since then. Provide your employees with substantial salaries, health insurance, and other necessities. Fun activities and perks (such as catered lunches and excursions companies like Google are famous for) also benefit employee retention.
Strategically placed digital signage in your business can keep employees engaged with relevant communications.
5. Implement Proper Communication Strategies
Broken communication systems frustrate everyone involved. Employees who feel lost or unheard will seek environments where they are listened to and receive information when they need it.
Streamline communication systems to improve how employees and departments interact with one another. If what you need to say can be said quickly, send it as an email, and don’t call a meeting. Digital signage is also advantageous for mass communication because you can display essential information on existing TV screens. This process reduces the likelihood of employees overlooking messages.
6. Provide Opportunities For Upward Mobility
Why should someone stay at your company if there is no room to grow? Your turnover rate will be high if an employee experiences burnout after one year, but there is no upper-level position for them to advance to.
Make sure your employees have clear upward mobility. The tech industry, for example, experiences much higher turnover rates amongst women compared to men. According to Indeed, the number one reason women leave the industry is due to a lack of career trajectory (28.1%). Some other employee retention ideas include providing mentorship programs and continued learning opportunities so that employees can pursue their ambitions internally.
Opportunities to move up in their careers encourage employees to stick with your company.
7. Foster a Healthy Company Culture
Employees who are engaged, satisfied with their supervisors’ leadership, and have opportunities to make friends at work are less likely to quit. Deloitte reports that 85% of surveyed executives say employee engagement is important or very important, so your organization’s culture should be friendly and encourage mediating problems before they intensify.
In the end, employee retention is an art, not a science. Incentivize your employees to stay at your company with a robust employee retention plan that considers your culture, your operations, and their needs.