Strategies for Retaining Employees and Minimizing Turnover
Employees leave organizations for many reasons; oftentimes these reasons
are unknown to their employers. Employers need to listen to employees’
needs and implement retention strategies to make employees feel valued
and engaged in order to keep them. These retention methods can have a
significant and positive impact on an organization’s turnover rate. Here
we’ll take a look at some of these strategies.
According to strategic planning consultant Leigh Branham, SPHR, 88% of employees leave their jobs for reasons other than pay: However, 70% of managers think employees leave mainly for pay-related reasons. Branham says there are seven main reasons why employees leave a company:
1. Employees feel the job or workplace is not what they expected.
2. There is a mismatch between the job and person.
3. There is too little coaching and feedback.
4. There are too few growth and advancement opportunities.
5. Employees feel devalued and unrecognized.
6. Employees feel stress from overwork and have a work/life imbalance.
7. There is a loss of trust and confidence in senior leaders.
Turnover Facts and Figures
Turnover is costly. According to Right Management, a talent and career management consulting firm, it costs nearly three times an employee’s salary to replace someone, which includes recruitment, severance, lost productivity, and lost opportunities. Life Work Solutions , a provider of staff retention and consulting services, provides the following turnover facts and rates:
• Over 50 % of people recruited in to an organization will leave within 2 years.
• One in four of new hires will leave within 6 months.
• Nearly 70% of organizations report that staff turnover has a negative financial impact due to the cost of recruiting, hiring, and training a replacement employee and the overtime work of current employees that’s required until the organization can fill the vacant position.
• Nearly 70 % of organizations report having difficulties in replacing staff.
• Approximately 50% of organizations experience regular problems with employee retention.
From these statistics it’s clear that it’s important to develop a retention plan to retain employees and keep turnover low.
Retention Methods
As explained by EA Consulting Group in a recent white paper, the dilemma facing organizations is whether to invest more time and money fine-tuning their recruitment strategy or to pay extra attention to retaining the talent they already have. Recruiting new staff is expensive, stressful and time-consuming. Once you have good staff it pays to make sure they stay (Main, 2008).
Think of retention as re-recruiting your workforce. Recognize that what attracts a candidate to a particular job is often different from what keeps that person there. While salary certainly is a key consideration for potential employees, pay alone won’t keep them in a job (Angott, 2007). Advantageous aspects other than strictly compensation attract good employees; something more than a number retains them. Today employees are looking for a career package, including a comfortable company culture, career path, diversity of responsibilities, and a work/life balance (Griffiths, 2006).
Here are some effective methods employers utilize in order to keep employees happy and part of their organization instead of looking for employment opportunities elsewhere.
Training. Training employees reinforces their sense of value (Wingfield, 2009). Through training, employers help employees achieve goals and ensure they have a solid understanding of their job requirements (Maul, 2008).
Mentoring. A mentoring program integrated with a goal-oriented feedback system provides a structured mechanism for developing strong relationships within an organization and is a solid foundation for employee retention and growth (Wingfield). With a mentoring program, an organization pairs someone more experienced in a discipline with someone less experienced in a similar area, with the goal to develop specific competencies, provide performance feedback, and design an individualized career development plan (Goldenson, 2007).
Instill a positive culture. A company should establish a series of values as the basis for culture such as honesty, excellence, attitude, respect, and teamwork (IOMA, 2008). A company that creates the right culture will have an advantage when it comes to attracting and keeping good employees (Main).
Use communication to build credibility. No matter what the size of the organization, communication is central to building and maintaining credibility. Many employers get communication to “flow up” through a staff advisory council (or similar group) which solicits and/or receives employees’ opinions and suggestions and passes them on to upper management (IOMA). It’s also important for employees to know that the employer is really listening and responds to (or otherwise acknowledges) employee input.
Show appreciation via compensation and benefits. Offering things like competitive salaries, profit sharing, bonus programs, pension and health plans, paid time off, and tuition reimbursement sends a powerful message to employees about their importance at the organization. The rewards given to employees must be meaningful in order to impact their perception of the organization and therefore have a marked influence on its retention efforts. Moreover, if an organization promises a reward, it should keep that promise (Gberevbie, 2008).
Encourage referrals and recruit from within. Having current employees offer referrals could help minimize confusion of job expectations. Current employees can realistically describe a position and the environment to the individual he/she is referring. Another way an employer can lessen the impact of turnover is to hire from within, since current employees have already discovered that they are a good fit in the organization (Branham, 2005).
Coaching/feedback. It’s important for companies to give feedback and coaching to employees so that their efforts stay aligned with the goals of the company and meet expectations. During an employee’s first few weeks on the job, an employer should provide intensive feedback. Employers should also provide formal and informal feedback to employees throughout the year (Branham).
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According to strategic planning consultant Leigh Branham, SPHR, 88% of employees leave their jobs for reasons other than pay: However, 70% of managers think employees leave mainly for pay-related reasons. Branham says there are seven main reasons why employees leave a company:
1. Employees feel the job or workplace is not what they expected.
2. There is a mismatch between the job and person.
3. There is too little coaching and feedback.
4. There are too few growth and advancement opportunities.
5. Employees feel devalued and unrecognized.
6. Employees feel stress from overwork and have a work/life imbalance.
7. There is a loss of trust and confidence in senior leaders.
Turnover Facts and Figures
Turnover is costly. According to Right Management, a talent and career management consulting firm, it costs nearly three times an employee’s salary to replace someone, which includes recruitment, severance, lost productivity, and lost opportunities. Life Work Solutions , a provider of staff retention and consulting services, provides the following turnover facts and rates:
• Over 50 % of people recruited in to an organization will leave within 2 years.
• One in four of new hires will leave within 6 months.
• Nearly 70% of organizations report that staff turnover has a negative financial impact due to the cost of recruiting, hiring, and training a replacement employee and the overtime work of current employees that’s required until the organization can fill the vacant position.
• Nearly 70 % of organizations report having difficulties in replacing staff.
• Approximately 50% of organizations experience regular problems with employee retention.
From these statistics it’s clear that it’s important to develop a retention plan to retain employees and keep turnover low.
Retention Methods
As explained by EA Consulting Group in a recent white paper, the dilemma facing organizations is whether to invest more time and money fine-tuning their recruitment strategy or to pay extra attention to retaining the talent they already have. Recruiting new staff is expensive, stressful and time-consuming. Once you have good staff it pays to make sure they stay (Main, 2008).
Think of retention as re-recruiting your workforce. Recognize that what attracts a candidate to a particular job is often different from what keeps that person there. While salary certainly is a key consideration for potential employees, pay alone won’t keep them in a job (Angott, 2007). Advantageous aspects other than strictly compensation attract good employees; something more than a number retains them. Today employees are looking for a career package, including a comfortable company culture, career path, diversity of responsibilities, and a work/life balance (Griffiths, 2006).
Here are some effective methods employers utilize in order to keep employees happy and part of their organization instead of looking for employment opportunities elsewhere.
Training. Training employees reinforces their sense of value (Wingfield, 2009). Through training, employers help employees achieve goals and ensure they have a solid understanding of their job requirements (Maul, 2008).
Mentoring. A mentoring program integrated with a goal-oriented feedback system provides a structured mechanism for developing strong relationships within an organization and is a solid foundation for employee retention and growth (Wingfield). With a mentoring program, an organization pairs someone more experienced in a discipline with someone less experienced in a similar area, with the goal to develop specific competencies, provide performance feedback, and design an individualized career development plan (Goldenson, 2007).
Instill a positive culture. A company should establish a series of values as the basis for culture such as honesty, excellence, attitude, respect, and teamwork (IOMA, 2008). A company that creates the right culture will have an advantage when it comes to attracting and keeping good employees (Main).
Use communication to build credibility. No matter what the size of the organization, communication is central to building and maintaining credibility. Many employers get communication to “flow up” through a staff advisory council (or similar group) which solicits and/or receives employees’ opinions and suggestions and passes them on to upper management (IOMA). It’s also important for employees to know that the employer is really listening and responds to (or otherwise acknowledges) employee input.
Show appreciation via compensation and benefits. Offering things like competitive salaries, profit sharing, bonus programs, pension and health plans, paid time off, and tuition reimbursement sends a powerful message to employees about their importance at the organization. The rewards given to employees must be meaningful in order to impact their perception of the organization and therefore have a marked influence on its retention efforts. Moreover, if an organization promises a reward, it should keep that promise (Gberevbie, 2008).
Encourage referrals and recruit from within. Having current employees offer referrals could help minimize confusion of job expectations. Current employees can realistically describe a position and the environment to the individual he/she is referring. Another way an employer can lessen the impact of turnover is to hire from within, since current employees have already discovered that they are a good fit in the organization (Branham, 2005).
Coaching/feedback. It’s important for companies to give feedback and coaching to employees so that their efforts stay aligned with the goals of the company and meet expectations. During an employee’s first few weeks on the job, an employer should provide intensive feedback. Employers should also provide formal and informal feedback to employees throughout the year (Branham).
Read more | hr.blr.com