- Posted by: Matt Muriel
- Category: Culture & Retention, Recruitment & Selection, Small and Mid-Sized Business
You’ve put in a great deal of effort trying to attract top talent by offering great benefits, but now that you’ve attracted the talent, what do you do to keep them?
This is where coming up with a strong employee retention strategy comes into play. By developing such a strategy, you can ensure that all of your hiring efforts aren’t in vain. Because even the best hiring strategies in the world don’t matter if you can’t retain the people you attract.
That’s why for this week we wanted to address employee retention. What is it, how do we measure it, and what do we do about it are the questions that we’ll be answering so that your recruitment efforts aren’t wasted by a high turnover rate.
What is Employee Retention?
Employee retention can be defined as your organization’s efforts at keeping talented employees with the company. Employers achieve retention by focusing on offering a positive work environment, providing competitive pay and benefits, showing appreciation for employees’ efforts, and more.
Focusing on developing employee retention strategies can be a great way to reduce employee turnover and keep your business competitive in the job market. Having a certain turnover rate can be considered “healthy” for a business depending on what industry you are in but having too high of a rate can be a costly financial and administrative burden.
How Do You Measure Employee Retention Rate?
By calculating your employee retention rate, you can begin to get an understanding of where your business stands with retaining new hires. The formula for calculating the rate is simple to calculate and can be done through the following:
Using this formula will give your employee retention over a period of time. Periodically checking what your employee retention rate is can allow you to finetune your retention strategies. Are your new hires being onboarded properly? Are you offering competitive benefits?
Are you creating a positive, yet challenging, work environment? These are just some questions that can help you improve your employee retention rate.
How Do You Improve Employee Retention Rate?
Now that you know what your employee retention rate is you can start building an employee retention strategy. There is no one size fits all solution to having a low retention rate, as it differs from business to business, but there are still several common practices you can implement into your business that have been proven to increase employee retention.
We’ve talked extensively about onboarding in the past, and if you had read those blogs then you would know that onboarding every new hire is an effective way to prepare them for their future position in the company. By teaching new hires about their job and the company’s culture, you are setting up their foundation for a long and successful tenure at your business.
One great way to attract and retain talent is by offering attractive compensation packages to your employees. Offering a generous salary is a start, but also offering health benefits, retirement plans, paid time off, and remote work options are attractive ways to keep employees with a company long term. Sitting down with your employees and having them understand their benefits will allow them to see the value they get with sticking with your company.
This is similar to benefits but not as traditional as PTO or health care packages. Perks can be small things that you offer employees for a job well done like catered lunches, a stocked kitchen with snacks and coffee, or even discounts at popular retailers. Small benefits like these make an employer stand out and can greatly boost employee morale with usually little investment.
Annually reviewing your employees’ performance can allow you to see how your employees are performing, as well as let you work with them to establish short- and long-term goals for their next performance review. This is where you can help remind them of their successes with the company and constructively criticize them on how they can improve.
Training and Development
Making an effort to invest in training your employees can show your commitment to their professional development. Training your employees allows them to gain new skills in your business and open up new opportunities for them. Some businesses will provide tuition reimbursement, pay for continuing education training, or hold workshops to earn certificates for different subjects.
Communication and Feedback
Communication among the company should be open, direct, and clear. Having a strong communication structure in your company can make employees feel that their voices can be heard. Be sure to be honest and provide constructive feedback to your employees when addressing their performance. An employee’s sense of wellbeing in the company can greatly be affected by an open communication line to management, and significantly impact employee retention.
Evaluate your employee retention rate annually and tweak your employee retention strategy at least once a year. Play with different retention strategies to try and see what works for your business but remember to also listen to the suggestions of your management team and their subordinates to help inform your strategies.
Improving retention rates shouldn’t be a difficult process. By actively seeking to improve your employees’ satisfaction with the workplace and connecting with them to understand their wants, you can retain talent in your company and help your business grow.
Need help keeping your employee engaged and satisfied? SolveHR offers specialized strategic human resource strategies that can help you increase your employee retention. We make HR easy so you can focus on what’s important—Growing your business!