Employee retention is a major factor for businesses of all sizes and types. Today, with more employees choosing to leave organizations—or the workforce completely—employee retention strategies are critical.
Employee retention has major impacts on your business at all levels. Fortunately, there are actionable ways to increase employee retention by addressing employee morale, focusing on career development, and setting a compensation strategy at your organization. It is also crucial for any leader who is interested in lowering employee turnover to examine and communicate employee benefits, focus on training and recognition programs, emphasize work-life balance, and promote job security.
Below, are 8 factors of employee retention every employer should consider.
Employee morale
Employee morale is the psychological well-being of the workforce. It’s often a proxy measure for employee satisfaction, but morale goes well beyond. It’s about the psyche, both of an individual employee and also the collective workforce. it’s also a key factor in employee retention.
When your morale levels are high, so too are your productivity and employee retention. Conversely, lower rates of morale make it more likely people will leave and can greatly shape workplace culture. A pattern can develop where low morale leads to high employee turnover, which worsens morale and leads to more departures.
Fortunately, there are steps you can take that boost morale, job satisfaction, and, indirectly, retention. These include:
Communication
Regular, consistent, and transparent communication is important to ensuring information is shared throughout the workforce. Whether through newsletters, town halls or all-staff meetings, leaders need to communicate to keep morale high and create a work culture that values transparency.
Managers as coaches
Managers should be trained to act as coaches. That means doing more than pushing for productivity. Instead, they should help employees to find their innate strengths and use them in the workplace. The result is a positive work environment that values professional development.
Feedback
Allow employees to be a part of the conversation – about strategy, procedures, and priorities. By providing employees opportunities to give feedback, employers acknowledge the value of those insights. One important note: Be sure that if you seek employee feedback, you loop back to communicate what of that feedback was incorporated into decisions.
Career development
Career development opportunities can play an important role in employee retention. In a competitive market for labor, providing a strong career development program can help keep employees and improve recruitment efforts. Making career development a theme from recruitment to onboarding to evaluation can positively change a company’s culture.
A recent Gallup survey, called the American Upskilling Study, indicates that employees are seeking opportunities to improve their skills while on the job. Among the key findings:
61 percent of employees noted that upskilling in the workplace was an important factor for staying in their job.
71 percent indicated that job training and skills development increased their satisfaction with work.
57 percent of employees want to update their skills.
48 percent would opt to switch jobs in order to gain access to skill-building.
If you’re considering launching a career development program, keep the following in mind:
Assess the landscape. You want to begin this work by understanding what employees want and need. Understanding the skills gap, what programs add value, and which opportunities will be received positively are critical steps to take before developing your program.
Customize your training. One size will not fit all, especially in a large organization with employees doing different types of work. Your sessions should cater to the needs of each career path.
Remember, bigger isn’t better. Training programs do not need to be multi-day sessions and conferences. Today, there are ample ways to provide career development opportunities via video-on-demand programs, Zoom sessions, or mentoring programs.
Train your managers. Managers need to buy into any career development programs they implement. Training managers to endorse, encourage and support career development goes a long way toward boosting participation. It also helps employees feel as though the development work is encouraged and growth opportunities are on the horizon.
Income
Salary and income factor greatly into how valued employees feel and an employee’s decision to stay at their job. While job satisfaction and morale are large factors, it’s clear that employees who feel they are compensated fairly are more likely to stay with the organization.
While increasing wages and salaries are the obvious way to correlate income to retention, there are other ways that companies can tackle the issue:
Consider total compensation. Many organizations provide employees with a calculation of their total compensation. This figure represents regular pay, plus benefits costs, such as contributions to retirement plans or health benefits. This tactic can be tricky if employees believe that the costs of benefits are not really a factor in their total income.
Evaluate your benefits package. A comprehensive benefits package can provide employees with financial security and peace of mind.
Subsidize education and training. Some organizations provide financial incentives for people to further their education or training. Supporting the tuition costs and providing time for employees to continue their education is a powerful way to demonstrate value and support employees in their career growth.
Offer strategic pay adjustments. Taking a careful look at your employees and their value to the organization can help you decide if you need to adjust pay in certain cases. Whether it’s the role in the organization, skill set, or potential to leave for a competitor, retaining top talent can be a smart investment.
Tie recognition to rewards. Having an employee recognition program is a powerful way to celebrate good work and meaningful contributions. Many organizations develop visible, valued employee recognition programs to honor top performers for work well done. Connecting financial compensation to those rewards can be an important motivator for employee performance and can also help with retention and decreasing turnover rate.
Meaningful benefits
Is your benefits program compelling, both in the recruitment and retention of employees? Benefits programs need to be viable vis a vis your competition and meet industry standards. Your benefits program should be tailored for your workforce, providing benefits that are resonant and valued by the workforce.
Tailoring benefits means taking a close look at what your employees need. For example, are there lots of pet owners among your employees? If so, consider offering pet insurance.
Also, be mindful of the social factors that are at play in today’s world. For example, many employers are now offering Juneteenth as a paid holiday.
Others are giving employees paid time to volunteer in their community. Flexible working arrangements or fully remote work are increasingly the norm. Some companies are even offering reimbursements for childcare. Ask your team members what perks are most important to them.
Here are four tips for evaluating and developing a compelling benefits program:
1. Acknowledge and communicate. Telling employees that you’re evaluating your benefits packages, with an eye toward expansion, can be a powerful motivator. As part of this process, some organizations survey employees on their interest in various types of benefits that might be added to the mix.
2. Assess options. Assessing your program involves several steps, such as obtaining benefit usage data, cost analyses, and trends. These analyses should include compliance mandates, flexible offerings, and what technologies are available to manage benefits programs.
3. Recognize the changing shape of work. Work has changed, with the pandemic shifting many workplaces to remote or hybrid modalities. Your benefits package may need to shift to reflect the new ways in which we work and what we need. For example, allowances for furnishing a home office or paying for wi-fi may be more appealing than they were a few years ago, and many companies are now offering flexible work schedules or remote work options.
4. Analyze and act. With clear information about demand, usage, interest, and costs, you can formulate a plan for expanding your benefits package. Presenting the options to employees as an enhancement of existing offerings can be an effective tactic for boosting retention.
Ongoing training
Continual training opportunities help employees become more valuable and more valued.
One important reason ongoing training helps with retention is the way it increases credibility with your workforce. Providing training—on technologies, processes, or machines—helps employees and the organization itself.
A word of caution: Employees need to know that the training they are receiving will benefit them in addition to the organization. If the training can lead to professional opportunities or increased compensation, it will be seen positively.
Ongoing training can provide considerable advantages for your business, including:
Improved efficiency
Competitive advantage
Safer workplaces
Healthy competition among employees
All of these factors will lead to increased employee engagement which will increase retention.
Recognition
Recognition programs celebrate all the good things employees contribute to the company. Employee recognition programs help employees see that their work is valued and important. These reward systems are especially important in times of change or uncertainty, providing a sense of stability and security. Lack of recognition can affect employee retention, as it leads to employees feeling undervalued.
Recognition can come in many shapes and styles. There are grand, highly visible programs that reward employees for specific contributions or alignment to company values. Other programs are more direct and personal, with colleagues or managers calling out great work.
Even small gestures, such as encouraging managers to give handwritten thank-you notes, can go a long way toward employees feeling more valued.
Work-life balance
Work-life balance has long been a contributing factor to employee well-being, burnout, and retention. Maintaining a healthy work-life balance can infinitely improve the employee experience.
A recent study indicates employees value work-life balance higher than compensation. The demand for work-life balance was considerable from the earliest days of the pandemic, with 75 percent of respondents expressing a desire to remain remote.
Stability and job security
With market volatility, threats of a recession, and inflationary pressures, employees today are stressed. How can you assure employees that their jobs are secure? Here are a few tips:
Be transparent in communication about the organization’s financial health and workforce.
Minimize distractions that can lead to unsettled feelings.
Address rumors and industry news that can be distressing.
Continue to provide strong benefits and training programs.
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Retaining employees is essential for an organization’s bottom line. Being intentional about strategies to keep employees, your organization, and workforce will be better in the long run.
At Gusto, we offer solutions to enhance your benefits program and enhance your talent management. Learn more about working with Gusto to improve your employee retention rates.
