If you own a business, you’ve undoubtedly poured immense energy into building its value and making...
This article was co-authored by Ellen Wood, President & CEO of vcfo, and Paul Hagerty, Senior HR Consultant in vcfo’s Dallas market.
Eleven Factors Supporting Employee Retention Through Reduced Turnover
Finding and retaining new talent has become incredibly difficult, time intensive, and costly for businesses. This is especially the case given that the unemployment rate is near an all-time low and companies are operating amidst what some are calling “The Great Resignation.” That’s why it’s more important than ever for businesses to do all they can to hold on to the employees they have and not be left open to unnecessary and regrettable employee churn. This requires an in-depth and objective assessment of attraction and retention practices, as well as a view of what competitors and those in other markets are doing.
Here, we look at eleven key factors that employers should pay attention to when it comes to minimizing attrition.
1. Workplace Culture
Developing and maintaining a strong and fulfilling workplace culture is paramount to keeping good employees. A recent MIT Sloan study found that a “toxic culture is 10.4 times more likely to contribute to attrition than compensation.” Five culture trends for 2022 are: flexibility, rebuilding connection, revisiting engagement, more personalized recognition, and technology’s increasing role in building culture.
2. Compensation
It is crucial for employers to keep a close watch on, and respond to, current salary trends in their industry and in areas of specific expertise. If your compensation is not competitive, you will lose high-performing, talented people who know their worth. Salary is not the only consideration. Understand and promote your total compensation offering to your current and prospective employees. The odds of attrition increase if comparable positions in the market are paid at a significant premium.
3. Employee Benefits
Most employers now offer medical, dental, and life insurance coverage. Employee benefits extend beyond these areas, however, and include items such as 401Ks, HSAs and FSAs, and more. Many employers are now offering tuition assistance and some even student debt forgiveness. Employers should seek to understand what benefits matter most to those they employ and find an attractive combination that best matches what they’re looking for. Periodically reconsider your offering and adjust as the market evolves to maintain your competitive edge.
4. Incentive Programs
Incentives come in many forms, from bonus plans to commission and referral programs. The key with incentives is to clearly tie them to the delivery of desired results, ensure they are reasonably attainable, and make them meaningful.
5. Perks
Some perks are trendy and without lasting power. They vary widely, from free gourmet coffee and ping-pong, to fitness areas, club memberships, unlimited PTO, and more. Perks with more staying power, such as daycare (financial support or on-site), eldercare, tuition reimbursement, student debt support, sabbaticals, employee recognition programs, and others are very well received. Perks may not be the deciding factor in a candidate deciding to take or stay at a job, but they do contribute to workplace culture and talent retention.
6. Work Model Flexibility
Remote and hybrid work models are now widely accepted and here to stay. Work flexibility extends beyond where employees get their work done, and can include when an employee gets their work done. To meet employee needs, companies can adopt elements such as remote workplace, flex-time, compressed schedules, or reduced hours schedules.
7. Employee Recognition
Employees want to work in an environment where they feel valued. Employee recognition efforts go a long way towards instilling those feelings. Recognition components include verbal and written praise, bonuses, 360-recognition, frequent feedback from managers, and more.
8. Advancement Opportunities
A clear path for advancement fosters productivity, improves morale, and reduces absenteeism. “Clear” is a key word here, as transparency is especially important in building and maintaining trust that employees will be genuinely and fairly considered for advancement. Career transparency is supported by well-articulated guidelines and criteria for what skills, qualities and characteristics are needed at the next level.
9. Training and Development
Providing new challenges and opportunities to increase skill sets helps advance an employee’s career and broadens what they can do for the company. Introducing variety and cross-training also helps to mitigate presenteeism and promotes trust. Utilizing the widely available learning and development tools available allows self-paced self development.
10. Hire the Right People
Retention begins with a fully informed recruiting process. Clearly articulated job descriptions, well trained recruiting staff, and robust onboarding practices lead to selecting and retaining the right people. A strong start will help keep new employees properly engaged, informed, and confident in their decision to accept the role.
11. Ask Your Employees
The best way to learn what employees like and dislike about their work, their culture, and their environment is to ask. Simple surveys, in-depth surveys, and all between are available from many sources. What better feedback source than the people living the roles and the culture the roles are in? Ask. Listen. Assess the results. Develop action plans. Execute the plans.
Engage Employees to Build an Environment They’re Glad to Belong To
Continuous and recurring feedback loops should be in place encouraging employees to openly share their needs, wants, frustrations, successes, and failures. These feedback loops can come in the form of employee surveys, employee portals, and most importantly, an environment where employees feel comfortable and genuinely encouraged to share what’s on their mind without any fear of negative consequences.
Retaining key talent isn’t getting any easier for employers. But lower costs, improved morale, higher productivity, reduced absenteeism, positive brand reputation, positive company culture, and an array of other benefits show that attention, investment, and energy focused on creating an environment that employees want to belong to and stay with is well spent.
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Request a free consultation from a vcfo HR consultant who can help your company improve employee retention. We’ve worked with more than 5,000 business teams in our 25+ years, would love to hear your story and concerns, and share how our experience and collective wisdom can help.
