With so many changes taking place in our workplaces (wherever and whatever they may be!), conversations about employee retention are critical. While supporting employees during and through post-pandemic transitions requires planning, empathy, and clear communication, these priorities are hardly unique to these strange days.
What is employee retention? Why is it important?
The best way of looking at this is on the other side of the coin, namely, employee churn. It signifies the rate at which people leave a company’s employ. It also puts the churn reasons under a microscope to assess their impact on the organization’s bottom line and staff morale.
Reasons for churn
- Lifestyle Circumstances: This covers things like retirement, childbearing, child-care, illness, and spouse relocation.
- Poor Employee Experience (EX): This includes feeling under-appreciated or under-rewarded, contributions going unrecognized, and ego-deflated in front of peers and family. It can also involve deficient company support, stunted personal development, and inability to connect to the company culture.
EX is composed of numerous touchpoints, starting with the interview for a position and ending with the exit interview. It’s a complicated network of interactions between the employees and their team members, subordinates, bosses, customers, events in the company, external stakeholders, and more.
Some touchpoints are unique, happening perhaps once or twice in the employee journey. Others repeat over and over — maybe every day. A good example of a repeated touchpoint is an employee consistently interacting with an autocratic manager. If those repetitions create discomfort or ill-feeling, it will likely be a churn instigator no matter how good the rest of the EX is.
Also, a one-off touchpoint can quickly derail an employee journey when the emotions get too hot. Perhaps it’s the straw that breaks the camel’s back. Suppose the company bypasses an employee for a promotion in favor of a peer. Should the aggrieved person suppress an intense feeling of unfairness, resignation may be in the cards. Management should leave no stone unturned in understanding all the touchpoints. The goal is to erase the disruptive ones and capitalize on those that develop positive employee engagement and enthusiasm. Cancerous or mildly infected touchpoints are almost always at the root of poor EX employee churn.
The employee churn effects
The Society for Human Resource Management (SHRM) calculates that a replacement cost ranges between six to nine months salary when an employee leaves the company. We’re talking over $50,000 for an individual earning $6000 monthly. Multiply that by, say, seven or eight employees terminating, and even enterprise-size companies can feel severe ROI erosion. Together with customer churn, it ranks as the number one profitability disrupter.
The direct cost is only half the story. What about the impact on staff morale amid these sometimes unceremonious exits? The “I’m next on the chopping block” syndrome, said or unsaid, can slow the work pace down dramatically. Then there’s the undermining of a project if the departing employee was part of a team effort. How do you replace the position and keep the continuity going? Time loss and substantial unforeseen expenses are general symptoms. Productivity may slow to a crawl.
The bottom line is that employee churn is poisonous. A program to reinforce employee retention strategies and commit to employee engagement is a priority in every industry.
The seven best ways to promote employee retention
It may seem strange to you, but we’ve been on this topic all along. Yes, the way to establish employee retention is to stop doing all the things that create churn. That may seem a bit too generalized. Speaking more specifically, here are the moves that make it happen:
Onboard your employees the right way.
Bringing someone new into the company is the beginning of the employee’s journey. It starts with an interviewing process, learning about the inner workings of the business, and possibly some pre-training. After that, meeting other team members and management, and then the orientation process (that may take months). Recruits, no matter who they are, enter a new environment nervously. They are frequently sensitive to things you or the long-termers pay no attention to. They need to get the lie of the land to move through it and make a good impression.
Onboarding goes hand in hand with employee feedback and management feedback. The quicker you can integrate the newbies as regular team participants, the better. Allocating a mentor from the staff to guide them along and get them set up in a decent office space is crucial. Alternatively, organize them remotely, but either way, show them the ropes (strings and knots included). If the onboarding goes askew — where touchpoints disappoint the recruit — you could get a resignation midstream instead of progress forward. Some HR pundits believe it’s the most crucial phase because you have the chance to make a first and lasting impression. If it’s not a good one, employee retention is a remote possibility.
Go so far as to establish an onboarding policy and protocols. Scrutinize early exits for clues to obstructive onboarding touchpoints. Take it seriously and make sure that after onboarding that the cultural theme you conveyed stays consistent.
Establish transparency throughout the organization.
Encourage employees to express concerns, air ideas, share with team members — to become contributing staff members. The rumor mill, if it gets rolling in a business, can destroy morale. It happens when things occur without explanation, where exclusion (versus inclusion) is a driver. Whispers can get out of hand quickly by creating fears that aren’t genuinely warranted.
Transparency involves employee feedback through one-on-one discussions with management and using a range of employee feedback surveys available. The most crucial thing about openness is the follow-up: Employees want to see where their input leads. Does the company use the new ideas or at least air them to the rest of the team?
- Are dissatisfactions addressed quickly and convincingly?
- Did anything change by speaking out?
- Is the company one that prefers lip service to action?
Employee loyalty vitally depends on the freedom to speak one’s mind and a culture that reacts in meaningful ways. It creates a sense of belonging and an excellent way to recognize employees for their contributions.
Recognize your employees.
In transparency (see above), we touched on employee recognition. It goes a lot further. Think of it this way:
- Employees, like everyone, want to stand out from the crowd
- They want their friends, family, and peers to see them as someone special.
Recognition doesn’t have to involve money. It may be a mention, an award, free tickets to a concert, or an invitation to a special event. The key considerations when it comes to recognition:
- Don’t make it a one-off. It needs to be ongoing, a mainstream feature of the corporate culture.
- Every recognition action must be meaningful. If it’s not an action that stands out as extraordinary, the intention may well backfire as “false” or “superficial posturing.” Employees may even interpret it as patronizing.
- The more overt it is to people who matter in the employee’s life, the better.
Share the money.
There’s so much written about salary and bonuses not being primary motivators. Forget about it. It’s a foundation stone of employee retention. Suppose your remuneration scales lag the industry yardsticks, and you expect the employee to go that extra mile. In that case, you’re in the realm of wishful thinking. All the other motivators mentioned above and below lose their energy if you’re underpaying your staff. That’s only as a start. Consider this:
Suppose a company is public or under the mantle of transparency shows growing profits and revenues. Nothing is more attractive to a team than the demonstration of success. Everyone wants to be alongside a winner. However, a question is sure to arise within the context of human nature, namely, “What’s in it for me?” Indeed, it’s a crucial touchpoint, and unless management answers it resoundingly, solid employee retention is questionable. HR departments should focus on:
- Share option programs
- Flexible bonuses that connect to achievement in the workplace
- Raises that outperform industrial averages.
Keep the employees moving toward their highest competence levels.
Employees want to grow and develop. They see the work structure and training accommodations as significant contributors to those goals. Management styles that stifle individual progression will kill employee retention in their tracks. Rule-and-divide doesn’t work in the modern corporation. Employees expect their leaders to create an environment where anything is possible. Encouraging certifications, ongoing formal education, providing YouTube tutorials, podcasts, and webinars are integral to skill and talent advancement.
Climbing up the ladder based on the merits of one’s capability is a fundamental pillar of retaining valuable employees. Show them that there is a ladder and help them as much as you can to scale it. Sometimes it’s one rung at a time, while some employees can spring to the top in a flash. Whatever the case is, create the infrastructure that allows it to happen.
Don’t forget that your employees belong to families outside of your company.
Yes, while they are with you during the day, there are distractions. Child-rearing, daycare, and marriage issues (like divorce, separation, and more) come to mind. Also, travel distances may be an obstruction easily missed, as may overtime or taking work home. Family interferences are indirect touchpoints that can have a ripple effect on work performance and, in the end, result in a resignation or firing. If transparency (see above) is part and parcel of your culture, these influencers will undoubtedly emerge. Management can’t pretend it doesn’t exist. On the contrary, helping to keep family tensions out of the picture will substantially boost employee retention.
Finally, pay attention to your corporate culture.
This refers to the core beliefs and behaviors that drive the business activities. It brings all the constructs dealt with above into focus:
- Autocratic vs. Participative management styles
- Willingness to delegate
- Rewarding success meaningfully and often
- Recognizing performance with monetary incentives
- Providing constructive feedback
- Seeking constructive feedback
- Training, training, and more training
- Techniques in place to motivate teams
- Rallying staff members around a shared vision and mission
- Instilling values such as transparency, integrity, and work ethic
- Easing employees family tensions wherever possible
- Treating the onboarding process with the seriousness it deserves
Your cultural framework is where it all starts. It’s the blueprint to make all the employee retention activities work in your favor. If there are cultural inconsistencies within the framework of your operation, employees will detect them. All the pieces have to fit together and resonate as credible to consolidate employee loyalty and stem employee churn.
Employee retention goes to the heart and soul of your business and strategic planning. ROI objectives depend on your ability to implement the seven actions outlined above. A company like Sogolytics is at the forefront of this vital arena. They have resources and employee feedback surveys that can help you shift methodologies and processes so that employees stay with you long-term. If ever professional assistance was a telling factor, this is it. Give Sogolytics a call to help you create an employee journey that becomes an example of how to do it in your industry.