A study by Jobvite indicates that 33% of the new hires quit their jobs within 90 days of joining.
If employees don’t stick with a company, it becomes imperative for the human resources team to decipher the various reasons behind their behaviour and build effective employee retention strategies.
On an average, a company has to shell out an amount equivalent to 20% of an employee’s salary as the cost for employee replacement. Apart from the monetary considerations, the company also loses an individual’s talents, ideas and accumulated organizational knowledge, credibility, and customers.
Now that it’s almost the time to welcome the new year, let’s take a look at some of the most popular retention strategies which ruled 2019. But before that, let’s first look into the strategies which did not work and, then, move towards learning from the policies which did.
Retention Strategies That Didn’t Work
Here are some popular retention strategies that did not make it to the mark and were simply deemed as ineffective.
1. Across-the-Board Solutions
No two employees are alike. Each individual may be at a different point in his career path and have achieved a different level of proficiency. However, a majority of retention solutions implemented in most of the companies look at things from a broader perspective and treat all the employees at the same level.
In reality, it is better to personalize retention solutions to specific categories or identified turnover issues. It makes more sense to adopt a personalized retention strategy at least for high valued employees who are considered flight risks.
2. Historical Retention Metrics
Most companies evaluate the turnover numbers from the data collected over previous years and stop their analysis there. There is no room given to predictive analytics and forward-looking metrics which could anticipate the issues to prevent upcoming turnover in a team.
While the historical trend of turnovers can only pinpoint what went wrong in the past, there is a growing need to use analytical metrics to understand real-time problems and take proactive measures to curb retention issues before they occur.
3. Pay Rises and Annual Bonuses
Pay rises and annual bonuses are not bad things. But when a company solely relies on these measures to retain employees, they do not turn out to be that effective. If pay is all that you are offering, you are not getting to the heart of the matter.
It’s pretty easy for your business rivals to trample your efforts with a fatter paycheck and take along with them the best talents from your firm. Although employees value monetary benefits, a one-time raise every year is not something that will keep them motivated. Recognition awards, performance bonuses, perks and more will matter more for them to stay motivated.
4. Exit Interviews Just for the Sake of It
Most companies conduct exit interviews just for formality. While letting an employee go is inevitable at times, it is still essential to understand the real reasons why the employee made that decision. Exit interviews should be powerful enough to throw light on critical matters, like toxic managers, interpersonal conflicts, malpractices, etc., so that they can be averted in the future and, in turn, worked on to minimize employee turnover.
Retention Strategies that Worked
A lot has been written already about employee retention strategies in various management books, but you might not know if each would work well for your organization.
Here are some effective retention strategies that are relevant to all organizations:
1. Right Fit is Important to Get a Head Start
It’s no rocket science to assess an individual’s skills and make a decision to hire them for an apt role based on their skillset. With that being said, companies should refrain from asking textbook questions in the interviews and go beyond to get a clear all-round view of the candidate. When you hire the best fit for your company, it will be easier for you to retain them without much effort.
2. Foster a Happy Workplace
Apart from the financial advantages a role offers, the perquisite candidates seek is the workplace environment which will make them comfortable and value their contribution. After all, a happy workplace has a multiplying effect on the overall productivity of the employees. A positive work environment and culture is the one where employees feel safe and can voice out their concerns or opinions without any inhibitions.
3. Support ‘Choose Your Own Workstyle’ Culture
Organizations that support a “choose your own workstyle” culture will boost employee retention rates by more than 10 per cent. Providing your employees with the autonomy to make their own decisions to undertake and complete their assigned work is critical. Apart from this, incorporating the principles of activity-based working into the workspace design has been very useful for the employers.
4. Bond Beyond Professional Ties
In formal companies, there are definite hierarchies and set guidelines to follow. There are only structured communications patterns talking about the expectations of each designation. All goes well until one day when it reaches a saturation point and becomes monotonous for the employees. The employees should, instead, be encouraged to go beyond professional ties and get to know others better. They should be urged to indulge in informal tête-à-tête, frequent team outings and other team-building activities which bring warmth and human touch to otherwise cold, formal relationships.
5. Gamification Techniques to Boost Performance
Adding contexts of gaming with meaningful rewards to the day-to-day activities, performance targets and similar strategies help to make the tasks achievable and lucrative for the employees. With gamification, employers offer up-to-the-minute performance feedback, allowing the employees to get a better sense of how they’re doing overall. It honours the intrinsic motivators of recognition, purpose, sense of accomplishment and mastery.
6. Mentor/Buddy Culture
Assigning a mentor or buddy to a relatively new employee is a great onboarding idea. This way, the newcomer will not be lost and will feel confident while embarking on a new role. The mentor can coach new employees, and the new employee can offer a fresh take on things. On the whole, this will help generate a creative collaboration with innovative ideas.
7. Providing Leadership Opportunities
Many employees feel that they are capable of contributing more than the expectations of their current roles. Therefore, assigning challenging tasks, opportunities and responsibilities is a great way to help the employees step up for more. As a result, employees will feel more satisfied.
8. Continuous Feedback
Communication should be a two-way street where employees can voice their ideas, questions or concerns and managers can openly put forth their honest inputs. Instead of letting issues build up until the annual review or performance appraisal meeting, a continuous feedback system should be adopted to keep the communication smooth. This will help clear up any misunderstandings and pave the way for a win-win situation.
9. Work-Life Balance
The work-life balance, which provides the much-needed space for employees to take off from a heavy workload, is essential. If your employees are expected to work continuously for long hours and be at your beck and call, you are more likely to run into trouble with employee retention. Provide flexible work options, freedom to telecommute and more to ease the burden and improve work-life balance for your employees.
Go beyond the old annual bonus, increments and more to offer real benefits that employees value the most. Incorporate wellness perks, including mental health summits, yoga sessions, vacation packages, well-positioned employee discounts, and subsidized gym memberships to stretch an employee’s paycheck. There are limitless innovative ideas you can try to provide out-of-the-box perks to your employees.
Now that a new year is almost around the corner, it’s time to step up your employee retention game and reduce your turnover.
Happy New Year!