Hold On to Your Best Talent with 5 Tips to Reduce Employee Turnover
We are in the midst of a new wave of hiring as pandemic restrictions continue to ease across the country and businesses ramp up production and services to meet rising demand. With more than nine million open jobs, continuing job gains aren't enough to meet employer needs for new headcount and back-fill positions. What can organizations do to hold on to the employees they have?
Your Retention Strategy Playbook
When it is difficult to fill open positions, the last thing you want to see are valuable employees voluntarily walking out the door. Retention is imperative during this time of the “great resignation.”
Limited available talent sets the stage for fierce competition for top talent among recruiters seeking to lure away your current employees. Employers across several industries (especially those offering hourly wages) face increasing pressure. Failure to act could result in your best employees believing the grass is greener on the side with your competitors.
Here are some practical tips to add to your retention strategy.
1. Promptly Update Salaries to be Competitive in the Market
Traditionally, top employees may have put up with mid-range salaries, but this is changing. To stand out during the labor shortage, more businesses are hiking their starting salaries to attract more workers. Take Target, for example. In June 2020, they boosted their starting wage from $13 to $15 an hour. Walmart launched a similar pay hike across the board in March 2021. And in June, Southwest Airlines announced plans to raise their minimum pay to $15. This is the case for higher-salaried positions¹, too.
If you have valuable team members you need and want, now's the time to secure their loyalty. It’s often better to “right-size” their paychecks now instead of the end of the year or at performance review time. Many organizations are working through off-cycle reviews and pay raises to address current pay gaps and rising wage demands.
Remember, replacing a skilled employee can cost six to eight months of their salary in recruitment and training costs. The bottom line? Often, employee turnover is more expensive than paying a higher salary.
This is where software like LaborIQ® provides a strategic advantage by helping identify pay gaps so you can detect retention risks early. This AI-based compensation and labor market software enables you to compare current salary data for job titles across different cities, industries, experience and market conditions to ensure you are offering a competitive wage.
But salary isn’t the only factor in reducing employee churn. A substantial benefits package can be a powerful retention tool, especially when you consider that throughout the pandemic, healthcare, insurance and well-being became prime concerns for many employees. As many as 98% of business leaders plan to offer or expand at least one employee benefit, like child and senior care benefits, mental health support and remote/flexible working opportunities.
2. Establish a Better Work-Life Balance
Over the past year, 44% of the workforce started working five or more days a week in remote locations. Consequently, many of them have experienced greater autonomy over their work and benefitted from more flexible schedules. This enabled workers to spend more time with their families, take care of their pets, make time for exercise and maintain their homes. It’s not surprising that more than 65% of employees want to continue working remotely full-time.
Clearly, candidates want the option to work from home, so if this is a possibility that does not impede productivity and engagement, let them - it's a surefire way of becoming a more attractive employer. Even if full-time, remote work isn't an option, you may be able to emulate organizations like Citigroup, Ford and Target by offering a hybrid approach that allows employees to split their time between working from home and being in-office, resulting in a happy medium.
3. Ensure the Leadership of Your Management Teams
Disagreement or dissatisfaction with a manager or leader is one of the most common reasons people leave their jobs. In fact, this is true for as many as 57% of employees. Bad managers make the workday unpleasant and can destroy employee morale. With employees coming back into the workplace and having other possible employment opportunities, are you confident your managerial team is aligned on culture, communication, employee engagement, brand voice and all that comes with continually driving people to be their best?
Ultimately, those in people operations, human resources and people management should receive continual training and guidance from leadership to share the company vision and goals, inspire, manage and empathize with their teams. Rather than hiring only on experience, assess and provide access to training on communication and social skills that are also vital to a being a good manager and galvanizer of people.
4. Listen to Your Employees
Reports suggest that returning to work will be an anxiety-inducing experience for roughly half the U.S. workforce. As people return to the office, it could be a turnover-reducing move to conduct an anonymous employee survey to learn how they feel about working in the office and whether they're satisfied with management.
The key is to use this feedback to implement change. Whether it’s providing management training, implementing new policies or shaking up your management style - this could go a long way toward retaining your best team members.
Working from home enabled many employees to take a step away from work and consider what matters most to them. That’s why it’s essential to understand what employees want from their roles. According to a recent report by Qualtrics, regularly listening to your staff has a considerable impact on retention and engagement. At the end of the day, people just want to be heard, right?
So, collect feedback frequently, and in different ways, to learn what your team needs to be fulfilled and fully engaged. Conducting a survey at the right time could help you catch employees thinking about leaving, providing a chance to address any issues before it's too late. Be sure to tell your employees that you received the feedback – and what you are doing with it.
It’s also a good idea to start conducting 'stay interviews.' Like exit interviews, which are used to determine why employees are leaving, it’s helpful to understand the reasons employees are staying in their roles or with the company. This approach provides valuable insight into what motivates your team and, more importantly, identifying where there's room for improvement. You'll also get a feel for whether employees are actually engaged or just hanging on due to a lack of opportunity elsewhere.
The upshot: Listening and improving the employee experience advances engagement, productivity and job satisfaction, all of which have the positive effect of boosting employee retention.
5. Provide Opportunities for Growth
Providing professional development opportunities is key to increasing employee engagement. Unsurprisingly, 43% of workers are unsatisfied with their career trajectory. Often, first-class employees are ambitious and want to climb the ranks. So, they need to know there's an opportunity for growth – if not in position, in experience and skill elevation and/or gain. In contrast, a lack of career progression opportunities can lead to disengaged, bored and uninspired employees.
In the wake of the pandemic, opportunities to train, reskill and upskill should be taken seriously for several reasons. Reskilling is a powerful tool for boosting engagement and retention. But, thanks to the labor shortage, hiring new workers has become problematic. So instead of hiring new staff, looking for opportunities to train existing talent to take on new responsibilities could be a lifeline for your business.
Talk with your high-performing employees. Ask:
- What are your goals?
- What skills do you want to develop?
With these key insights, you may find a mentoring program with senior staff members could be beneficial. Alternatively, do some research to find online courses, certifications or advanced learning through professional organizations that could benefit your workers.
Retain Your Top Talent in 2021
Between 2020 and 2021, most businesses have seen unprecedented amounts of change. However, now that pandemic restrictions are easing, you have an opportunity to minimize the disruption of your workforce.
A focus on retention strategies is a must now and in 2022. It is a crucial time to update salary structures and benefits packages to align with market demands. Listen to employees and offer more flexibility and assistance to help your workers feel satisfied with their work conditions. By showing empathy and a willingness to meet employees halfway, you'll help secure a smoother path forward for your business while reducing the costs that come with employee churn.
Remember the saying that it is less expensive to keep a customer than to find a new one? This also applies to your employees, especially in the current hyper-competitive job market. So, if you haven’t activated your retention strategy, now is the time to move ahead.
Sources: 1) efinancialcareers.com/news/2021/06/barclays-salary-increase