Maintaining the right team when growing a high-performing, profitable business can be a significant challenge. When done well, the gains can be considered both for the business and the employees. However, the challenges of hiring and retaining employees can be a complex juggling act. In fact, most HR personnel will affirm the fact that employee retention is without a doubt the single biggest challenge facing the human resource department.
What’s more, employee turnover has a direct bearing on net profitability. Companies spend a considerable amount of resources, time, and money on a number of variables that come along with hiring new personnel. These include direct costs like new hire orientation, training, advertising fee; and indirect costs like staff interviewing time and administrative costs to name a few. Losing valuable resources to a higher bidder or a more lucrative opportunity is too easy to be taken lightly.
Organizations that have an issue of negative employee turnover need to stem the revolving door at their company. We have derived a checklist that will assist you in taking control of your employee retention problem.
Compensation is Key
It’s no rocket science and data never lies -- employee compensation is key when it comes to retaining your most valuable resources. A study by LINC HR showed that 78% of all online job applicants were looking for better compensation. A majority of these job applicants were otherwise happy in their current jobs but were not satisfied with the salaries they received at the end of the month. Companies should make it a point to keep compensation and benefits current or as per industry norms. Waiting for a yearly appraisal just doesn’t cut it, especially when there is a line of companies waiting to pay your resources a higher wage.
Hire the Right Resources
Getting it right the first time may be easier said than done especially when it comes to hiring the right resources. There are a number of studies that indicate that candidates tell white lies during interviews just to get the job. However, once they get the job they struggle to settle into their new role as they may not have the requisite skill set. Eventually, the new employee is unable to handle the pressure of coping with this new responsibility or just loses interest because of the mismatch in work roles. To avoid this situation, the recruiting HR should be extra careful and recognize the signs of a “right fit” candidate. HR personnel should also take the time to define the role clearly to ensure that there is no ambiguity in communicating this with the candidate.
Today’s millennials crave a flexible work environment. A study by the Boston College Center found that a whopping 80% of employees found flexible work arrangements to have a positive effect on employee retention. Companies that have evolved their work policies to cater to employees at a more humane level are found to be more favorable to work in. This includes providing work from home options, flexible shift hours, longer break timings, and more. Companies are increasingly waking up to the reality that having strict rules and regulation won't have any benefits on employee outcomes. So, if you aren’t offering your employees workplace flexibilities, you can be sure that your competition is.
Develop A Culture Of Recognition
Employee recognition had a positive effect on employee retention. Research shows a direct correlation between job satisfaction and employee recognition. Employees who are content or satisfied in their job also feel recognized for their contribution to the overall success of the organization. Companies that have developed a culture of recognition generally fare better simply because their employees are happier. Many companies make the mistake of treating employee recognition as a once in a year affair. This for a lot of employees may seem disingenuous with an element of subjective bias creeping in. Recognition should be an ongoing process that happens throughout the year. When employees feel appreciated for their hard work, they tend to stick around.
Make Room for Growth
Employee growth is another important factor that has a positive impact on employee retention. In fact, companies that prioritize employee growth are seen as having a higher value. A survey conducted by Cornerstone made a direct connection between lack of growth opportunities and higher retention turnover. Companies that aren’t developing their resources are perceived as not having confidence in investing in their resources. This is a terrible sign for an employee who will invariably turn away in search of greener pastures.
Employee turnover can be an indicator of the overall health of an organization. Employees who feel happier about their work tend to stay longer. They also work harder in the hope to receive recognition for their hard work. The management in turn recognizes their hard work and does what is necessary to ensure that they remain in the company. Companies that struggle with negative employee turnover have deeper issues that manifest themselves in employees leaving. For companies that are struggling with employee turnover, these tips will help build support functions that will assist in lowering turnover rates.