Glossary of HR Terms

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Employee Retention Solutions

Employee Retention Solutions for Modern Times

What Are Employee Retention Solutions?

Your business’ success depends on people — but not just the skills and abilities they bring to the table. A large part of your organization’s growth comes down to the consistency and stability of your workforce. If your workforce is one revolving door of departing employees, you can’t execute your business plan. That’s why implementing employee retention solutions should be one of your critical talent priorities.

Find out what employee retention solutions are, why they matter to your talent management strategy, and how to implement them at your organization.

Employee Retention Solutions 101

Employee retention solutions are the collection of processes and actions you can use to keep employees engaged and productive. Recognizing team members for their contributions to the business and providing the resources they need to continue performing at that level inspires people with greater motivation and purpose. And by building that engagement, you reduce the likelihood that they’ll want to leave the organization.

These solutions typically address areas including rewards and recognition, training and development, performance management, internal mobility, and employee experience. Common employee retention solutions include offering competitive salaries and benefits, creating a positive and healthy work environment, and providing opportunities for career growth and development.

There’s no one-size-fits-all employee retention solution, and most organizations use a combination of several programs to keep employees engaged. The best approach for you depends on the specific needs of your people and your business.

Why Does Employee Retention Matter?

Your people are the critical foundation for business growth. If that foundation is wobbly, your results will be uneven, too. Consider these reasons why employee retention isn’t just a talent priority, but also a business priority.

Stabilizes Workforce Planning

Workforce planning is the ongoing process of assessing an organization’s current and future staffing needs. A stable workforce allows an organization to better predict what those future needs are and to put a plan in place for meeting them. You can take proactive steps by reskilling employees to fill anticipated skills gaps and determining which employees to move into key leadership roles.

Of course, that becomes much more challenging in a high turnover workforce. It’s much riskier to invest in developing the people you have if they’re likely to be gone in three months.

But higher retention rates minimize the need to constantly backfill vacant positions. Instead of reacting to employee turnover, you can proactively develop the workforce to meet evolving needs, giving your business an edge over the competition.

Cuts Back on Hiring and Training Costs

Hiring is an expensive process, and the cost of training new employees adds to those expenses. The average cost per new hire is $4,700, according to SHRM’s recent benchmarking data. But for many employers, the association reports, those numbers can be much higher — as high as 3-4 times the position’s salary.

If employees are constantly leaving and you’re consistently replacing them, you’re probably spending much more on transactional hiring and training processes than you are on strategic, growth-oriented workforce development. Additionally, new employees tend to have a higher time to productivity than experienced employees, which can put a drag on efficiency and‌ reduce your profit margins.

Retaining employees, though, helps the business reduce these costs. You can invest more in developing the workforce you have than in hiring and training new people, and minimize the decrease in productivity that comes with hiring new staff.

Improves Employee Experiences

Employees suffer from an unstable work environment, too. They’re often stuck covering workloads for open roles, which can cause employees to feel taken for granted. The people who remain also may have trouble connecting with new hires if they don’t expect them to stay long. And all that snowballs into a poor employee experience — and even more people leaving the organization.

Conversely, by improving employee experiences, companies create a more attractive work environment, which in turn helps with retention. When employees are happy with their work environment and feel valued, their job satisfaction, engagement, and productivity go up, which encourages them to remain part of your workforce longer.

How to Improve Employee Retention Rates and Reduce Turnover

Incorporate this basic formula for reducing turnover into your employee retention solutions.

First, identify the key factors that cause employees to leave. Common factors include compensation and benefits, work schedules, workloads, bad management, and an unhealthy company culture. You can discover the culprit in your business by identifying trends in employee satisfaction data.

Survey employees and collect data from exit interviews to pinpoint which factors cause the most turnover. Taking steps to overcome those challenges will help you create a positive impact fast.

Next, brainstorm some solutions for addressing the top causes of turnover. Some things you may not have complete control over (compensation and benefits, for example), but you can offer more transparency around why that’s the case. If pay is an issue, for example, you can demonstrate that your compensation aligns with industry averages and local market data. Another solution might be better managing workloads to make sure that people aren’t being asked to do more than their pay designates.

Finally, implement your solutions and monitor their effectiveness over a set time frame. Continue to survey employees to gauge whether the change has been successful and addressed their concerns.

5 Ideas for the Retention of Employees

There’s more to employee retention solutions than reducing turnover. Implement these ideas to not only keep employees, but also engage and motivate them.

Spark Connection in the Onboarding Process

Connection drives loyalty and purpose, which are both powerful components of a successful employee retention strategy — and a lot of critical moments of connection happen within an employee’s first few hours on the job. Make the most of that time by designing a thoughtful onboarding experience.

Communicate with each new hire’s co-workers to introduce the new team member and let everyone know when they’ll start. Encourage team members and the new hire’s manager to reach out and welcome them before their first day. Implement a buddy system at work to pair new hires with a designated team member to answer their questions and show them around.
Make sure the new hire’s tech and work equipment are set up and ready to go before their first day. Empowering employees to begin work right away helps them connect immediately with their job duties and purpose.

Hugo Boss Australia was seeing significant turnover among retail workers in their first three months on the job. The team knew they needed a more engaging onboarding experience to drive long-term retention, so they partnered with Enboarder to connect new retail workers with the organization’s larger strategic vision. That small spark of connection spread like wildfire, with Hugo Boss Australia seeing a 77% decrease in turnover during the first three months of the retail employee lifecycle.

Offer Flexible Schedules and Work-from-Home Options

Sometimes employees leave a job they like (and are good at) simply because the hours can’t accommodate their needs. One of the simplest ways to foster engagement and demonstrate your investment is to proactively address this problem by offering flexible scheduling and work-from-home options.

These flexible working models provide employees with the ability to better manage their time and commitments outside work, leading to a better work-life balance. Offering more control over when and where they work helps improve both employees’ work and personal lives.

There are several ways to offer flexible schedules and work-from-home options, so it’s important to find the option that best suits your company and your employees’ needs. Train managers to discuss optimal scheduling with each team member to allow them to decide when and how they work best.

Implement Recognition Programs

Recognition programs show employees that management is paying attention to their individual performances and contributions to the company. That type of encouragement enriches the employee experience and drives a stronger sense of purpose and fulfillment.

Recognition programs can take many forms, such as rewards, bonuses, and verbal acknowledgement in front of their peers. Recognition programs should be tailored to both larger company culture and individual employees. Communicate recognition programs to all employees so everyone is aware of how they can be recognized for their contributions.

Promote Professional Development

Learning and development opportunities demonstrate your investment in people, which can increase both loyalty and engagement. Make sure these opportunities are visible to employees across the workforce and train managers to help their teams discover their options for professional development.

Encourage employees to attend conferences and workshops related to their field, and reimburse them for expenses related to courses and certification programs that benefit their work. Allow employees to use paid time to work on projects that improve their skills.

Create a mentorship program that pairs experienced employees with newer ones to help entry-level team members gain a better line of sight into opportunities for growth. Encourage employees to share their expertise with others through cross-functional team projects or by contributing articles, blog posts, or presentations.

Drive Loyalty with Employee Retention Solutions

An investment in employee retention solutions is an investment in your business — and in your people. Building a stable foundation for growth enables team members to do their best work, which keeps the cycle going by supporting better engagement. When people feel more connected to the business’ purpose and to their work, they’re more likely to return your investment in them with one of their own — and that’s a powerful driver of employee loyalty.