One of the questions we hear from leaders the most is, “How do we hire effectively and retain our best employees?” Improving employee retention is a huge goal for most organizations, and one that can seem elusive and confusing, especially in today’s market where work-shortages abound.
In this article we’ll cover:
- Why Employee Retention Matters
- Why Employee Retention is Difficult in Today’s Market
- 8 Best Practices for Improving Employee Retention
- Give a good first impression
- Everyone involved in hiring should work as a team
- Care about onboarding
- Care about relationships
- Let go of employees who aren’t a fit
- Find out what motivates your employees
- Pay your employees fairly
- Help your employees find freedom in their job
Why Employee Retention Matters
Employee retention is the sign of a healthy work environment. While some leaders might see their employees as dispensable cogs in a wheel, this is short-sighted and problematic in the long run, both to the health of the business as well as the health of the employees. Below are 4 reasons employee retention matters.
- Hiring is costly. According to an article on Gallup, American businesses are losing one trillion dollars to employee turnover every year.
- Constantly having to hire new people means that employees aren’t investing in the business. Employer-employee relationships should go both ways, both investing in each other.
- High voluntary turnover is indicative of larger problems within the business. If employees are leaving at a high rate, there are likely problems within the business structure and leadership that will eventually lead to the company’s demise.
- Training is time-consuming. Constantly having to train new people to do jobs that were already being done well costs the company a lot of time that could have been spent reaching business goals.
Why Employee Retention is Difficult in Today’s Market
In April of 2020, unemployment skyrocketed to The Great Depression era rates as businesses were forced to shut their doors, temporarily or in some cases permanently, laying off millions of American workers. Now over a year later, unemployment rates are still high, but with a twist.
In April 2021, The Bureau of Labor Statistics reported that there are 9.3 million job openings. This likely comes as no surprise; no matter which American city you live in, you’ve likely seen signs indicating a work shortage. While there are many theories as to why people aren’t going back to work, we find these four particularly compelling.
- Rethinking Career – After a year and a half of “abnormal” work environments, people are taking the opportunity to rethink their personal careers and direction, wanting to do work that feels meaningful and offers freedom.
- Work-Life Balance – People have different expectations and desires now regarding work-life balance, including the newfound ability and desire to work from home.
- Low Wages – People are fed up with the low wages they’re being offered by their jobs.
- Want to Feel Valued – The way companies dealt and continue to deal with safety measures during the pandemic have made employees feel undervalued in some cases.
So what can companies do to support their employees and retain them?
8 Best Practices for Improving Employee Retention
- Give a Good First Impression
Both the HR department and hiring manager need to put their best foot forward. Be responsive and get back to candidates quickly to set up meetings and interviews. Make sure to engage in good interview practices like Behavioral Inteviewing. Remember, you are reflecting who the company is and why they should join from the start.
- Everyone Involved in Hiring Should Work as a Team
HR shouldn’t hold the burden of finding people. HR, Recruiting, and Hiring Managers should work together as a unified and coordinated team to hire the best people.
- Care About Onboarding
Onboarding is critical. Showing the best of your culture and execution in the early days of someone’s time at your company could make or break their desire to stay. Hiring managers should have an onboarding plan well before the candidate is selected.
- Care About Relationships
To get people to stay at the company, ongoing management, relationship-building, and placement become key. Operational managers should work together to find a better fit for employees who are frustrated or limited in their current department or position.
- Let Go of Employees Who Aren’t a Fit
It might seem counterintuitive to talk about letting employees go, but employees who gossip or cause interpersonal drama or who refuse to learn or take accountability can really drain a workplace culture. The goal of retention is to keep your best employees and develop those employees who may not be quite up to par but who have a desire to learn and grow with the company.
- Find Out What Motivates Your Employees
Different people are motivated by different things. One person might be motivated by accolades and appreciation while another might be motivated by more responsibility, a higher title, more money, or the opportunity to help more people. Find out what motivates each employee rather than trying to motivate everyone in the same way.
- Pay Your Employees Fairly
Here at B STATE, we focus on helping employees invest in their teamwork and the goals of the business. But we can’t ask people to invest time, energy, focus, and care into our business if we’re not willing to invest in them. If your employees are worried about their finances, they won’t be able to give your company 100%, at least not for long. Giving regular raises and bonuses is a great way to make your employees feel appreciated for the work that they’re doing as well as to make sure they’re not stressed financially.
- Help Your Employees Find Freedom In Their Job
Hourly work in the office can make hard-working employees feel like they’re wasting their time or spinning their wheels, especially if they can be more productive from home or can get their work done in a time frame shorter than 8 hours. Giving employees the freedom to focus on business results rather than the time spent getting to those business results can be a great way to improve company culture, employee happiness, and business outcomes all at the same time.