With today’s tight job market, it’s challenging for Human Resources departments to find good talent. So it’s even more important to retain your best people. It is critical to your business’s long-term health and success, and turnover costs are high. According to Employee Benefits News, it costs 33% of an employee’s annual salary to replace them.
Employee Retention Definition
What is employee retention? This is the ability of a company to keep employees on its payroll; and it’s easily quantified as your “employee retention rate,” which is simply a statistic showing how many employees stay at your company over a given period of time.
Keeping employees at your company is an important priority because the costs of employee turnover are so high. Finding great, skilled, new employees is never easy, especially in a competitive job market where candidates are getting lots of offers. Also, training those employees and giving them time to ramp up to full productivity takes time and can be costly. Employee retention is a key focus for any good human resources team.
Why is Employee Retention so Important?
Employee engagement—the percentage of workers who are “involved in, enthusiastic about and committed to their work and workplace”—has ticked up to 34%, according to Gallup. This is a sign of progress, but that also means two-thirds of our workforce is not fully engaged. Is that a good thing?
While it’s clear we’re on the right path, we can’t ignore the percentage of our employees who are disengaged. Engaged employees are happier, healthier, more productive, and more likely to stay at their current jobs, so we need to make sure all our workforce is engaged.
A great way to increase employee engagement is through communications. It is truly the center of every business initiative—after all, when employees don’t know what’s going on, you put your business initiatives at risk.Employee engagement has ticked up to 34%, according to Gallup. This is a sign of progress, but that also means two-thirds of our workforce is not fully engaged.
Here are 12 ways to improve employee retention without draining your HR budget.
1. Make sure your messages are reaching all employees.
How are you communicating with your employees? Do you have a communication plan to make sure you’re engaging your workforce and giving them the right information they need to thrive?
Often HR doesn’t have an internal communications strategy. Don’t assume your messages are getting to the right employees. Often, messages go unseen and unread by employees, which means your communication plan isn’t having the impact you think it is.
The best way to create impactful communications is to partner with your internal communications team. Then you’ll work with experts on supporting all your important HR programs: employee recognition, learning and development, benefits enrollment, etc.
Together you can collaborate using a workforce communications platform to truly connect workers to others and to tie initiatives to strategic objectives. A communications platform facilitates regular feedback and coaching, learning, personalization, social recognition, and participation in team or social activities.
2. Practice autonomy, purpose, and mastery.
After employees reach a certain salary threshold, they’re not generally motivated by more money. According to author Daniel Pink, Drive: The Surprising Truth About What Motivates Us, we are motivated by three things.
- Autonomy: You want control over the decisions that drive your work. And you certainly don’t want to be micromanaged by your boss.
- Purpose: We see this more and more with millennials and Gen Y. People want to be part of something bigger; maybe it’s your company’s mission or values. Make sure your employees understand what your organization stands for by making sure you communicate with them properly.
- Mastery: Give your employees feedback and the opportunity to develop their careers.
3. Develop a shared sense of purpose through volunteering.
Encourage employees to create a sense of community with their co-workers. When people form bonds with their colleagues, they can feel a deeper sense of loyalty to the company and the work they do. Volunteer activities (try your local food banks, art museums, Habitat for Humanity, or libraries) are a budget-conscious way to encourage employees to bond and interact in a new setting. A great example is how employees at Love’s Travel Stops celebrate “Share the Love Day” every Valentine’s Day with a community service event.
4. Recognize employees for their efforts and accomplishments.
Recognizing employees doesn’t have to cost a lot. In fact, it can be as simple as a shout-out at an all-hands meeting. This makes them see that others understand how much time and effort they are putting in.
You can also send public “thank yous,” birthday wishes (just don’t mention the age of the employee), and anniversary notices via your company-wide workforce communications newsfeed or intranet.
5. Improve collaboration.
Improved collaboration may help increase employee retention. When employees feel they are capable of building a productive partnership within the organization, they may be more likely to show greater job satisfaction and loyalty to the company.
Technology tools can also facilitate personal and professional connections with distributed teams that work in different locations. Social tools especially can help employees stay connected and increase engagement, trust, and rapport across geographic and cultural borders.
6. Use survey tools to gather feedback and gain deeper insight into employee talents.
Most organizations survey their employees once or twice a year, but The Wall Street Journal reports “regular pulse surveys and open feedback systems can help companies build a complete, real-time understanding of the issues their employees face.” Feedback and analytics from such surveys can help HR and team leaders to fully understand the expectations and issues of the employees in their organization. Try such tools as Glint, TINYpulse, or PeoplePulse. Also, by publishing surveys through workforce communications platforms, you’ll be able to ensure employees receive them.The Wall Street Journal reports “regular pulse surveys & open feedback systems help companies build a complete, real-time understanding of the issues their employees face.”
7. Encourage cross-departmental interaction.
Many executives assume employees should largely stay focused on the tasks in their own organization. However, some evidence suggests there’s more value in encouraging employees across all departments to develop an awareness of how everyone works. (The social-science term for this is ambient awareness.)
The bottom line is that managers should 1) allow and encourage interactions that aren’t necessarily strictly related to work concerns, and 2) allow and encourage colleagues across departments to communicate easily with one another. Occasionally reminding employees that it is also productive to invest time in creating healthy relationships in the workplace is also a good practice.
8. Invest in fun team-building activities.
If you want to improve communication with employees, organize team-building activities. Hosting low-key, fun events can be a cost-effective way to give employees a chance to know each other in new environments.
Having fun outside of the office can help employees release some of the stress and pressure of work, and can also facilitate coworker bonding. “Theme days,” athletic competitions, games, picnics, and potlucks can improve one-on-one communication among employees. Venturing offsite can help employees relax and be more comfortable. Give employees a chance to weigh in on what kind of activities they prefer through polling.
9. Communicate rewards to retain employees.
Many employee rewards programs are out of sync with how employees prefer to be recognized for their achievements and contributions.
Companies should do their best to tailor employee rewards to the preferences of their employees. First, be sure to offer rewards more frequently than once a year. Regular, small rewards (which may include money, rewards points, or expressions of gratitude) can have a greater effect on increasing employee engagement than a conventional pay raise.
Second, expand your definition of “rewards” beyond recognition or gifts. Don’t discount such elements as flexible schedules, overtime pay, sick leave, and professional development opportunities as ways to show you appreciate employees and the value they provide to your company. Rewards are really about showing support to employees in ways they find meaningful.
10. Share company news.
Sharing the latest company news, benefits, and what’s going on within the organization creates more transparency; and that helps with employee retention. Communicate via your workforce communications platform to target and personalize the right messages for the right employee groups, and at the right time.
11. Track your communication metrics.
By tracking and evaluating your communications metrics, you’ll have better insight into employee engagement. Use your communications platform to get a unified view of all your communications channels. Communications metrics will give you a good view of how engaged your employees are at work.
12. Create the best culture with internal communications
Which impacts your company’s employment brand more: the salaries you offer, or your company culture?
According to a recent report from Glassdoor, an employee’s rating of a company’s “culture and values” is 4.9 times more predictive of a company recommendation than pay and benefits. With this in mind, make sure your employees feel they can successfully maintain a fulfilling career and a fulfilling family life while working at your company (40% of employees believe this balance isn’t possible).A recent Glassdoor survey found that an employee’s rating of a company’s “culture and values” is 4.9 times more predictive of a company recommendation than pay and benefits
Conclusion: Yes, You Can Retain Employees without Spending More
You don’t need to spend more to make sure you retain the best talent. By improving communications, increasing team building, and recognizing employees, you will build the right company culture to organically improve employee retention.
Read more on how to improve employee engagement in our new eBook, “New Insights For HR: A Four-Step Guide To Improving Employee Engagement.”