Retaining key employees is critical to the long-term health and success of your business. Managers readily agree that keeping your best employees ensures customer satisfaction, increased product sales, satisfied, happy coworkers, and effective succession planning and historical and institutional organizational knowledge and learning.
Why Employee Retention Is Important
Employee retention matters. Failing to retain a key employee is costly to the bottom line and creates organizational issues such as insecure coworkers, excess job duties that coworkers must absorb, time invested in recruiting, hiring, and training a new employee.
According to Gallup:
- "The cost of replacing an individual employee can range from one-half to two times the employee's annual salary -- and that's a conservative estimate.
- "So, a 100-person organization that provides an average salary of $50,000 could have turnover and replacement costs of approximately $660,000 to $2.6 million per year.".
This is not only because of the lost revenues but also due to the fact that hiring and training a replacement is costly to your organization
For your more senior positions, often the services of a headhunter are required which can cost your organization up to a third of the position's annual salary. When these positions pay in excess of $150,000, this is a huge cost for your organization to absorb.
Exit interviews do provide one answer because departing employees can provide you with valuable information you can use to retain the remaining staff. Heed their results because you'll never have a more significant source of data about the health and well-being of your organization. Happy employees rarely look for a new job.
10 Retention Tips
This retention advice will help you keep your best, most wanted employees from job hunting. If these ten factors exist in their workplace, they are much less likely to want to leave your employment.
1. Make sure employees know what you expect from them. Management thinkers from Ferdinand Fournies in "Why Employees Don't Do What They're Supposed to Do and What to Do About It" to Marcus Buckingham and Curt Coffman in "First Break All the Rules" agree that constantly changing expectations creates unhealthy stress. Provide a specific framework within which people clearly know is expected.
2. Provide quality management or supervision. People leave companies because of managers and supervisors more often than they leave because of their actual jobs. Frequent employee complaints point to these areas:
3. Provide a platform for employees to speak their minds freely within the organization. Does your organization solicit ideas and provide an environment in which people are comfortable providing feedback? If so, employees can offer ideas, feel free to criticize and commit to continuous improvement—all factors that contribute to employee retention.
4. Allow employees to use their talents and skills. A motivated employee wants to contribute to work areas outside of his or her specific job description. Begin by taking the time to learn your employees' skills, talents, and past and current experience. Then, tap into it.
5. Provide a perception of fairness and equitable treatment. If a new sales rep is given the most potentially successful, commission-producing accounts, other staff members will inevitably feel cheated. If a new employee receives a promotion over the heads of long-term, existing employees, feelings of rancor will ensue.
Salaries are important too, of course. If a staff person with three year's experience is given a $15,000 raise and more senior staffers receive just $10,000, then undoubtedly the morale of the slighted employees will be affected. Even if the employee deserves the raise, recognize that these decisions will have a negative impact on others.
6. Tools, time, and training should be your best friend. When an employee is failing at work, ask, “What about the work system is causing the person to fail?” Employees must have the necessary means to do their job well. Otherwise, they'll move on to an employer who provides them with the tools they need to succeed.
7. Remember that exemplary employees want to learn and grow. Unless employees can try new opportunities, take on challenging tasks, and attend seminars, they will stagnate. A career-oriented, valued employee must experience growth opportunities within your organization to realize their potential.
8. Make sure senior management knows that an employee exists. This is a common complaint voiced during an exit interview. Even the president of a company needs to take some time to meet with employees to learn about their talents, abilities, and skills. Meeting with each employee periodically is a critical tool to help employees feel acknowledged and results in loyal, dedicated, committed employees.
9. Whatever the circumstances, never threaten an employee's job or income. Even if you know layoffs are looming, it's a mistake to foreshadow this information with employees. It makes them nervous no matter how you phrase or explain the information and your best staff members will update their resumes. You shouldn't keep solid performance information away from people but think before you say anything that makes people feel they need to search for another job.
10. Make staff members feel appreciated. Frequently saying thank you for a job well done goes a long way. And, monetary rewards, bonuses, and gifts make the thank you even more significant. Raises tied to accomplishments and achievement will help you retain staff probably more than any other action. Commissions and bonuses that are easily calculated on a daily basis, and easily understood, raise motivation and help retain staff, as well.
The Bottom Line
You can retain your valued employees if you practice these ten tips in your workplace. You'll keep your best.