In the present job market when employees are resigning at an unprecedented rate and looking for greener pastures, abundant opportunities are available for them on a global scale.
This has led to a decline in company loyalty and retention. According to Talent500’s latest survey of over 10,000 tech professionals, 57% of job seekers continue to look for opportunities even after accepting a job offer.
Employee turnover can be extremely expensive for companies as this report suggests. This is why it is expected of companies to invest in strategies that will increase their employee retention rate.
Why is employee retention important?
The success of any company at keeping employees is measured by employee retention rate. It is an important metric, especially during uncertain times like the pandemic as a low retention rate can be seen by prospective employees as a warning sign of a dysfunctional team. You must have strategies in place to retain employees for the long haul and to reap the benefits of high employee retention.
When you are not continuously interviewing candidates and onboarding new employees, the managers, and teammates can focus on important tasks that contribute to the company’s growth. This significantly improves the company’s output.
More satisfied customers
When you have enough employees, your company can provide better customer service. A happier customer base implies steady business. If you are understaffed, the teams will constantly struggle to keep up with customer requests and there can be burnout issues.
Key information remains in-house
When teams remain consistent, there is a higher degree of collaboration as members are aware of tools and techniques that help them work together. Also, retaining employees helps you keep key knowledge within the company that might give you a competitive advantage.
Replacing employees can be a costly affair. In the US alone, it costs a trillion dollars to hire employees every year. By improving employee retention, you can save millions that can be more constructively used to carry out other initiatives important for company growth.
3 ways to increase employee retention
For the sustainable growth of a company, it is important that employees feel part of the vision and goals. Your workforce is the only competitive advantage that cannot be copied, this is why it is mandatory to take all steps necessary to retain the talent at your company.
Given the fact that employee retention is of utmost importance right now, here are three strategies that can help with employee retention.
1. Set up a positive feedback loop
Industry leaders are aware of the fact that employees need positive feedback to keep up the morale and work productively. But for some reason, companies have failed to actively help employers with positive feedback. This scenario has undergone complete change post-pandemic, and employees expect you to provide an inclusive environment with more positive feedback.
That being said, in what proportion should you provide positive feedback?
A Harvard study suggested that the ideal ratio between positive and negative employee feedback must be 5.6 (positive) to 1 (negative). That’s 6 to 1.
We are not surprised, as positive feedback has always been psychologically proven to motivate employees to give their best with determination, going forward. This should not discourage managers from sharing constructive and corrective feedback when there is the need for it. Such constructive feedback is important to nip the problem in the bud.
Simply put, keep a track of how many negative comments you share with your employees about the positive feedback you provide. Do the math and commit to providing 4 to 6 positive comments for every negative or constructive feedback you give an employee.
2. Create continuous growth opportunities for employees
It is not uncommon to see companies promoting people from outside of the organization, but not providing any opportunities for in-house training and upskilling of existing employees. This is a terrible mistake that can cause you to lose not only the best employees but also degrade your employer’s brand.
When there is no way for employees to advance or improve in their company, they become disillusioned in their roles and are most likely to leave. Can you blame them for leaving a company where they cannot envision their growth?
This is why it is critical to create ongoing education programs that make your employees feel valued for employee retention. The opportunities for continuous growth give them something to look forward to and feel part of the company’s success. If you fail to help your employees see a laid-out path for advancement, your employee retention rates will continue to decline.
As an employee retention strategy, create opportunities for continuous growth by implementing training programs to help employees grow within the company. For this purpose, you can use outside resources such as workshops, online courses, and expert professionals. Employees will see such programs as a powerful incentive to stay with your company because these initiatives suggest that you are willing to invest in their future.
3. Include your employees
Just as the absence of growth opportunities drives away employees, feelings of isolation and exclusion can also increase the attrition rate. Your current and prospective employees want to feel purposeful at their jobs. It is important to them to know that they play a key role in helping the company achieve its goals.
As a measure to increase employee retention, you can plan strategies that enable diversity in the workforce, at the same time making inclusion a priority. According to Josh Bersin, founder and principal at Bersin by Deloitte, companies that have policies to encourage diversity, inclusion, development planning, and leadership building are 3.8 times more likely to coach people for improved performance, 3.6 times more capable to deal with personal performance problems effectively, and 2.9 times more likely to identify leadership talent and help them grow.
This is a remarkable study that suggests that companies must take a top-down approach to create a culture of inclusion, whether they are hiring leaders or doing performance management. There are no shortcuts to creating a culture of inclusion in the workplace.
The most effective step will be to have open conversations with your employees individually. Ask them about their thoughts on their roles within the company. Such open-ended strategic meetings will help managers understand how inclusive employees are feeling at your company. Depending on the outcome, you can frame policies to help them feel more at home.
With technology improving and becoming more accessible, companies are competing based on their workforce. It is more important than ever before to retain your employees for sustainable growth in the long run.
Talent500 can help you hire, build, and manage a global workforce. We keep employee retention high by creating optimal digital workplaces. Request a consultation today to discuss your requirements.