To put it succinctly, people are the sellers and it’s a seller’s market. With the current demand for qualified talent, employee retention should be foremost on your organization’s mind, as shown with the following statistics:
- An estimated 41 million people voluntarily quit their jobs in 2018. By 2019, that number is projected to increase to 47 million, or 1 in 3 workers.
- Each employee exit costs the organization about one-third of that person’s annual earnings in recruitment fees and lost productivity.
- In January 2019, the unemployment rate was just 4%. That number makes this one of the tightest labor markets in the last 50 years.
Why People Leave
Now more than ever, leadership needs to focus their attention on creating an attractive workplace experience for the purpose of employee retention. To most effectively do so, know the top reasons for why people leave:
- Career development – They found a better job or one where they feel there’s a greater chance to advance their career.
- Work-life balance – They feel overworked or their job doesn’t fit with their life preferences.
- Manager behavior – They may feel managers are too demanding, controlling, micro-managing, or even dishonest.
- Relocation – They move away from physical proximity to work. Even this reason is somewhat within your control, for if people are having a great workplace experience, they’re less likely to want to move.
- Compensation and benefits – They may feel that pay and benefits are lacking at your organization, or they may have found a more attractive package elsewhere.
- Personal, family, or emotional issues – This reason for leaving is a matter over which management has little control, unless a negative workplace experience is causing the issues.
- Job characteristics – They don’t enjoy the work they do and want to pursue a different field.
- Work environment – They’re not comfortable in their physical or cultural surroundings.
Obviously, some of these reasons for departure are easier to mitigate than others. When it comes to employee retention, knowing what you can control regarding the workplace experience is crucial.
Here are six ways to increase employee retention by understanding the needs of your people:
Offer Fair Compensation
Do your research as you can bet your people have done it. Know what your industry pays and make sure you’re on the competitive edge of that range. If you’re on the low end, you’ll have trouble attracting talent, much less retaining it.
If you’re below the industry standard, you’ll be scraping the bottom of the barrel for talent, and your people will leave the minute a better option arises.
One way to know if people feel they’re compensated fairly is to simply ask. They’re more likely to be candid with you if you ask for anonymous feedback about sensitive issues like money.
To give yourself some indication about everyone’s financial well-being, in a survey you could ask folks to agree or disagree with statements like:
- I make enough money to support myself financially.
- I can pay for personal things above and beyond the necessities.
- I need to work a second job to cover my financial needs.
The Olumo platform, for instance, provides simple text message surveys so you can gather real-time feedback data and quickly view actionable results. We do this all while carefully protecting the identities of your people via 100% anonymous feedback. Find out how it works!
Provide a Pleasant Work Environment
Your team generally spends a good eight hours a day or more at your place of business. Make it a pleasant place to be, since people spend most of their waking hours there.
Attention to details such as the temperature of the room, the amount of light, and the accessibility to kitchen facilities and clean restrooms make an impact on employee retention. Keeping the environment clean, comfortable, and colorful will positively affect mood, and therefore performance.
Another aspect of a pleasant workplace experience is the atmosphere in which people create. Positivity and cheerfulness can light up a room with few windows and poor illumination, although you should address the lighting problem if possible. Be creative about ways to foster camaraderie and rapport among colleagues.
Find Ways to Reward Good Work
Every organization has different budgetary restrictions, and few have unlimited capital to spend on incentives and rewards. However, good managers will recognize how important it is to make people feel valued, and they’ll find ways to show their appreciation.
Some companies ask people up front, during training, or even during the interview process, how they’d like the company to reward them for a job well done. While some people vote for bonuses and gift cards, others appreciate the value of verbal and/or written praise.
Have you asked your people about how they wish to be recognized? It’s never too late, and a quick survey asking for anonymous feedback will tell you all you need to know. To prioritize everyone’s well-being, gather data on how they feel about being rewarded. Ask questions like:
- Do you feel you’re being rewarded fairly for your work? Why or why not?
- Do you feel the compensation you receive is a fair tradeoff for the stressors you endure at work?
- In what ways could the company make you feel more valued and/or compensate you better?
Check in Regularly
When you’re reading a resignation letter, it’s a little too late to ask how the person is doing at work. Reaching out to people regularly and discussing their strengths, goals, and struggles will show your team that you're invested in them personally and professionally. These meetings don’t have to be more than 5-10 minutes long, and what’s 10 minutes of prevention when employee retention is the cure?
Short, regular employee surveys asking for anonymous feedback are another great way to check in. There are times when you simply don’t have 5-10 minutes to spend with every individual.
Empower Your Team
To save you unnecessary work and make people happy, let everyone take full ownership of his or her own responsibilities.
As management, you exist to facilitate and support. If you did your job right and hired experienced and talented people who know how to do their jobs, set them free to do it! Respect your people’s need to be trusted within their own areas of competence.
Does the word “transparent” scare you? It shouldn’t. Being transparent with people about the organization’s health and future will encourage their buy-in and make them feel like an invested part of the plan.
Furthermore, if you’re experiencing any troubles as an organization, every person can be an invaluable source of ideas for solving problems. Getting anonymous feedback or even direct feedback from your team is a tremendous way to brainstorm solutions.
Many leaders feel like negative feedback is personal, but if people don’t have the opportunity to give their input more often than once a year, it’s either too late or they’ve developed resentment.
Confrontations feel uncomfortable, but if feedback becomes normal practice (especially anonymous feedback), everyone becomes more comfortable providing it. The regularity also relieves pressure from management. When leaders are transparent and humble, people will choose to give feedback not out of frustration, but because they want to help.
Prevent the Domino Effect Today
According to Recruiterbox, “Employees who leave abruptly definitely can hurt the company’s growth, especially during the early stages. Finding a replacement [and] training them can cost a lot more than time and money. It might affect other employees and trigger negativity at work.”
People sometimes quit – it’s the nature of business. But if you make employee retention one of your top priorities, you’ll reduce the domino effect that one person leaving sometimes creates. Meet the needs of your people and they’ll meet your need to grow the business.