Employee turnover is a major problem for employers, especially in the aftermath of the COVID-19 pandemic. As per a survey, 4 in 10 employees want to leave their current organizations for better opportunities. Employees have a lot of freedom in the current times to switch over to positions that offer better professional development, flexibility, and more work-life balance.
In this scenario, employee retention has become a major requirement for companies. In a survey, 47% of the HR professionals admitted that employee retention is a top challenge they face even more than recruiting new employees.
Employee Retention and Its Importance
In the highly competitive job market, employee retention has become a major requirement for employers. Employee Retention is the ability of the company to convince its talented employees against leaving the said company for better opportunities elsewhere. It is a combination of strategies to lower the company’s attrition rate and ensure that talented professionals continue to work for the company for a long time.
There are many reasons which underline the importance of employee retention. Preventing negative financial impact on the company is a major reason. Recruiting, hiring, and training replacement employees is detrimental to the company’s finances. It is much less expensive to retain existing employees than recruit new employees. On average, an employee leaving the company costs 6-9 months of his/her salary to the company.
There are many benefits of employee retention such as more experienced employees in the staff who are professionally competent to solve problems on their own, increased productivity of the employees, motivated and engaged employees, better customer experience, increase in revenues, and reduction in cost associated with hiring and training replacement employees.
Employee Retention Strategies
Here are some effective employee retention strategies which companies can implement to reduce their employee turnover rates.
Regular one-on-one meetings between the managers and their team members are an essential part of employee retention. Constructive feedback must be provided to the employees regarding their performances in such meetings. The goals to be achieved must also be clearly articulated to the employees.
The employees must feel engaged with the company’s top leadership. To this end, the employees must be encouraged to express their views, concerns, and thoughts about any and every aspect of the company’s policies and other areas. Freedom to express their opinions motivates the employees to give their best for the company and increases their loyalty.
Two-way dialogue also enables the management to get correct feedback about the employees and detect discontentment and other issues.
Promote Professional Growth
Employees are more likely to leave a company where they witness no scope for professional development and career advancement. Thus, the employee retention policy of a company must include training programs and more opportunities for the employees to learn new skills and improve professionally.
Training programs, workshops, online courses, practical training, and other methods to boost the skills and educational levels of the employees provide strong reasons to the employees to continue working for that particular company. The company’s active engagement in advancing the careers of its employees is a strong element in fostering loyalty.
The efforts of the employees must be appreciated. The company’s top leadership should not merely be concerned with the results. The efforts of the employees in making a project successful or increasing revenues must be acknowledged. It can be in the form of rewards or bonuses. Employees gain more trust in their employers when their efforts are not brushed under the carpet but recognized.
Encouraging the employees to be more creative and supporting their innovations is a good strategy for employee retention. Innovation teams can be set up to explore new ideas and implement them with the active engagement of the employees. Many companies also use projects to promote innovations. Under this project, the employees are allowed to devote a certain percentage of their work time to personal projects.
Boosting creativity not only helps in retaining employees but also benefits the company as innovative ideas ultimately help the operations of the company.
The employee retention program of any company is incomplete if due consideration is not given to maintaining work-life balance for the employees. To this end, the company must implement flexible work timings, allow more time-offs and provide enough rest time to employees engaged in projects which run into late night.
In the aftermath of the COVID-19 pandemic, remote working has become common with more and more employees preferring to work from home. Companies must allow employees to work from home as much as possible. Even if complete remote working is not possible, the companies can allow flexible timings, compressed weeks, and partial telecommuting.
The workplace must not be suffocating for the employees. Lack of mutual respect in the workplace is another reason for employees leaving their current jobs. Thus, the employee retention policy of the company must include a series of measures to foster mutual respect among the employees.
The measures can be a smooth grievance redressal mechanism, a special committee to address complaints of workplace harassment, favoritism, etc. There must be a clear code of conduct common for everyone including the top management of the company. A healthy work environment is highly essential to retain employees.
Employee Engagement and consequently employee retention can be increased when the company takes an active interest in the personal well-being of its employees. To this end, the company can purchase group health insurance for its employees and their family members. Health insurance coverage gives a sense of financial security to the employees against high-cost medical treatments.
In addition, the company can arrange for periodic free health check-ups and counseling sessions to look after both the physical and mental problems of its employees.
How to Calculate Employee Retention?
Employee Retention metrics are used to determine whether or not the current employee retention strategies are working.
First, select a time period. Thereafter, use this formula: number of employees in the selected period/ number of employees at the beginning of the period × 100.
The employee retention rate must be higher than the employee attrition rate. Each and every strategy must be applied carefully in order to maintain this state. Employee Retention is a work in progress.