How do you make sure you keep hold of your most valuable and trusted employees?
Employee retention isn’t all about just paying people more money, it is much more nuanced than that so understanding the key motivators when you are trying to build a great workforce is important.
When you spend time, money and effort finding the right people, and then you train them to become a member of staff it can be very distressing when they choose to leave.
And of course financially, it hurts too.
So read on and find out how to retain good people.
In this post:
- Employee retention – why bother?
- Retention is an attitude of mind
- 7 ways to retain your best people
Employee retention – why bother?
It’s a fair question because there are any number of ways to recruit new members of staff so if someone decides to leave then that’s fine because you can just replace them right?
That all sounds well and good in theory but in our view, there are at least three reasons why it isn’t a good idea in practice.
1- Financial
Recruiting people is expensive.
Advertising for new staff costs a lot of money, especially if you want to use the most successful job boards or those that deal with technical staff.
If you choose to use a recruiter instead then that can cost up to 30% of the person’s annual salary and add to that the cost of interviewing then you start to see how expensive it can be.
2 – Time
When you bring in a new person it naturally takes them a lot of time to get up to speed.
It’s not their fault, they have to learn your systems and processes and even if they have done the same job for a different organisation that still takes time.
Then add that to the fact that you need to bring them into the company culture and they need to build networks within your business and with your customer then you can see why it is generally thought that it takes at least three months for someone to become properly productive.
3 – Culture
Imagine if you are sitting working with your friend and they announce that they are leaving.
Your business has made no effort to get them to stay and doesn’t seem too bothered that they are going.
What does that tell you about how valued you are as an employee?
Would that kind of culture encourage you to do your very best or would it instead say that you might be better off looking for another job?
Research has shown that many employers calculate the direct and indirect costs of bringing in new people as almost an entire year’s salary!
Worryingly businesses have also said that high staff turnover also affects innovation and agility.
In fact, when you add up all of the problems with bringing in new people, you can see that companies with a low staff turnover have a significant competitive advantage over their peers.
Retention is an attitude of mind
So when you want to work on employee retention where do you start?
You may think that bumping up people’s salaries is a good place to kick off but we’d argue that there’s something much more important to do first.
The best initial starting point is to embrace a retention frame of mind. You need to develop the culture of low staff turnover rather than putting sticking plasters on what are merely the symptoms of a poor culture.
Make employee retention one of your Key Performance Indicators and ensure you impress on your managers and supervisors that this is an area that you are determined to excel in.
7 ways to retain your best people
The one thing we’d argue against when you are working on retention is simply paying people more than your competitors.
A salary war is a false economy because the sort of people who only work with you because of the money are just as likely to jump ship when they get a better offer.
Yes, your salaries do need to be competitive but don’t make it the cornerstone of your retention policy.
So if you can’t pay more than your competitors what can you do? Here are our seven best retention options.
Show people where they fit in
One of the main reasons that people love working for smaller organisations is that they know where they fit in and how their work benefits the company.
So make that a key plank in your retention strategy by letting people know how important they are to your business, how the work they do helps and how they fit into the overall mission.
Develop a flexible working culture
Since the pandemic, this has become a much more acceptable and achievable part of the employment landscape but many employers resist this for no good reason.
Allowing people to split work between the office and a home base, introducing flexi-hours or being creative around working hours can pay massive dividends.
Invest in training
If an employee sees that you are investing in their future by providing development opportunities then you’ll see two major benefits.
The first is that people react very positively to employers that offer them the chance to improve themselves. They tend to be more loyal and a great training offer also improves their net promoter score.The second is that investing in training doesn’t just make employees more loyal, it makes them better at their jobs!
So training your people can directly improve the work that they do, meaning your company becomes more profitable and has a lower employee turnover rate.
You can find out more about developing your people in our article here. [Internal link to Don’t hire skilled people – develop them]
Recognise and reward
You really don’t need to give away a car every time someone does a good piece of work!
In fact, the simple act of recognising what they have done and saying a genuine ‘thank you’ can make a massive difference.
You should always give credit in public so that others can see that you appreciate the work people do and whilst it doesn’t have to be expensive, a small gift that has been thoughtfully chosen will improve engagement hugely.
Understand the power of feedback
People like to feel valued and that their contribution is worthwhile and one of the ways you can show this is to ask for feedback.
Asking people their opinions on decisions both large and small means that they don’t feel change is being imposed on them.
But there is an important point to make and that is that you do need to make sure that you either make the changes they suggest or you are completely transparent about why you can’t, otherwise the exercise will be wasted.
And get into the mindset of working in a collegiate way and always asking people’s opinions, especially where they have expertise or where a change directly affects them.
The worst thing you can do is to ask peoples’ opinions once a year and then ignore what they say!
Delegate and devolve
This is one of the hardest skills to learn and particularly affects smaller businesses.
Giving people extra responsibility and allowing them control over certain aspects of the business shows them in a very practical way how important they are to the business.
Devolving powers to team members improves retention but also moves tasks off your desk too.
Job swap
It is always worth looking at job swaps/shares to introduce variety into the workplace.
Giving people a chance to try other jobs makes life more interesting for them and is also very useful for the business.
What could be better than having a multi-skilled workforce that can cover any position if someone is out of the business through illness or annual leave?
Profit share
If people have the opportunity to share in the profits of the business that they are a part of then they tend to be much more engaged.
If employees know that their efforts will be rewarded with some of the profit you generate then this shows that they are a valued member of the team.
Develop amazing managers
One of the most common complaints from employees is the quality of the people who manage them.
In most businesses, there are at least a few layers of management meaning that even if you have the best CEO in the world, they can be let down by their junior management team.
Often the problem is that companies promote people who are good at their job but offer no support for the transition into management.
The trick is to make sure you invest in proper management training to bring out the best qualities and to show your new managers how to behave in their new role.
Use mentoring schemes with your more senior executives guiding and helping people onto the next rung on the ladder.
You’ll find that you develop an amazing cohort of junior leaders who will then go on to do great things for your business but also your staff turnover rate will magically drop too.
Employee retention – it’s about taking the time
There’s no rocket science involved in employee retention.
In fact, all of the things you need to do are fairly commonsense but the important thing is that you need to take the time to actually do them.
Make it a key plank of your business strategy and make sure that you do it consistently and don’t allow it to become just a flash in the pan.
Working at your retentions strategy will pay massive dividends for your business with a better workplace culture, a nicer place to work and of course a better bottom line.
If you’d like to talk to us about ways we can help with your retentions strategy then call us now and we’ll talk you through the options.