Why is retention important

Employee benefits also play a role in retention. Offering a competitive benefits package, in addition to competitive pay, reduces the likelihood an employee will find the grass greener elsewhere. Practices that contribute to retention arise in all areas of HR, and all roles within an organization will need to work together to develop and implement multifaceted retention strategies. Broad-based and targeted strategies, or a combination of both, may be appropriate depending on the circumstances.

Effective practices in a number of areas can be especially powerful in enabling an organization to achieve its retention goals. These areas include:. Broad-based strategies are directed at the entire organization or at large subsystems and are intended to address overall retention rates.

Examples include providing across-the-board market-based salary increases, changing the hiring process to incorporate retention-related criteria and improving the work environment. The data needed to help a company determine which broad-based strategies to implement typically come from three places:. Targeted strategies are based on data from several key sources, including organizational exit interviews, post-exit interviews, stay interviews , employee focus groups, predictive turnover studies and other qualitative studies.

This information can lead an organization to determine more specifically where a problem exists and to develop highly relevant and linked strategies to address the issue. For example, if female professionals are departing the organization in significant numbers, a company could review common reasons that women give for leaving a company and develop strategies to specifically deal with this group of employees.

People managers are key in the effective and efficient administration of an employee retention strategy. Having a management team that is educated about employee motivation, retention strategies, benchmarking and best-practices is critical to the success of the program. The following steps taken together can yield the information that an organization needs to determine the extent of its problem and to help shape the retention strategies that are implemented in response.

Establishing appropriate benchmarks—both external and internal—is a key first step in preparing to implement an employee retention strategy. As with all strategic initiatives, there are some common problems associated with employee retention programs. These include:.

Because there are so many different actions a company can take to improve its employee retention rate, it is not feasible to quantify the "typical" costs—hard and soft—of designing and implementing a program.

However, an organization should still try to budget its own initiative carefully. See To Have and to Hold. Any initiative or program—especially one designed to retain an organization's key talent—needs to be continuously evaluated to determine if it is effective and to identify opportunities for improving it. An effective way to determine whether the employee retention program is working is to conduct an independent audit of the way the program is affecting various groups of employees.

For example, are certain types of employees e. When you find a qualified candidate, find out if they're a good fit for your company by getting this information:. After you've discussed these topics, you should have a fair idea of the candidate's values, personality, and workplace expectations.

You should be able to determine whether they'll be a good fit for your company. To hold onto your employees and reduce turnover rates, you need to understand the reasons why employees decide to leave their jobs. Otherwise, you won't know what actions to take to ensure your employees stay. Why employees from a variety of industries chose to leave their previous jobs?

A survey [3] found that — other than moving or wanting a different work-life balance — all of the reasons given were related directly to the workplace, work environment, and compensation. This suggests that business leaders and the company cultures they cultivate are overwhelmingly responsible for employee turnover. Generally speaking, employees choose to leave jobs because they feel undervalued and unfulfilled. They also quit because they lack challenges.

Now you understand why employees leave their jobs, so you should do what you can to hold onto yours. A company's goals and values play heavily into its culture. This starts at the top, with the concept of Cascading Goals. Driving alignment between an organization's goals and employee's roles— Cascading goals— are a crucial part of a lean business model and should be a focal point of your management strategy.

An organization invests time and money in grooming an individual and make him ready to work and understand the corporate culture: A new joinee is completely raw and the management really has to work hard to train him for his overall development. It is a complete wastage of time and money when an individual leaves an organization all of a sudden. The HR has to start the recruitment process all over again for the same vacancy; a mere duplication of work.

Finding a right employee for an organization is a tedious job and all efforts simply go waste when the employee leaves. When an individual resigns from his present organization, it is more likely that he would join the competitors: In such cases, employees tend to take all the strategies, policies from the current organization to the new one.

Individuals take all the important data, information and statistics to their new organization and in some cases even leak the secrets of the previous organization. To avoid such cases, it is essential that the new joinee is made to sign a document which stops him from passing on any information even if he leaves the organization.

Strict policy should be made which prevents the employees to join the competitors. This is an effective way to retain the employees. Turnover is expensive. Everyone involved in hiring and training knows how quickly the hours can rack up - particularly if the position goes unfilled for a while. Employees constantly moving in and out mean potentially significant costs associated with:.

Depending on the role you are replacing, turnover costs can range from uncomfortably high to truly shocking. High turnover is particularly destructive because businesses end up paying these costs time and time again — sometimes even multiple times a year.

Employee retention can drastically reduce these expenses. Millennials overwhelmingly consider career development opportunities to be one of the most important elements of a company. However, only half of employees in a recent study said their employers provide career development opportunities that meet their needs and chances for advancement. People have a natural desire to grow and move forward, and making opportunities for them to do that by developing their careers is a fantastic way to boost retention.

An attractive healthcare plan is an ideal strategy for recruiting and retaining high-value employees. However, offering improved health benefits is also relatively expensive. HR team members have a lot of power to do good in this instance. Incentivize employees to adopt healthier lifestyles or achieve fitness goals. Naturally, raising salaries is not an inexpensive strategy. The study found that the happiness and satisfaction generated by the thrill of a raise lasted more than a week, but still less than a month.

One possibility that's interesting to consider is that regular evaluations and raises may be seen as more of a plus when they're part of a proactive and robust employee retention strategy. Second only to healthcare in importance to employees, a retirement plan is hands-down one of the best ways to incentivize employee retention.

A MetLife study found that retirement benefits were a key to earning employee loyalty. In fact, four in 10 employees said retiree benefits are a strong reason to stay with their company. However, there is a major caveat to k retirement plans — they have to be well-run. A healthy k optimized for employee retention has high participation rates, an emphasis on accessibility, a clear and scheduled onboarding process, and access to personalized financial advisory services.

And all that comes down to HR. In fact, an optimized k can actually save money for everyone involved, and be a lot easier to manage than you might have thought. This strategy covers a broad range of potential employee benefits and tactics - like leave benefits, flexible working benefits, wellness benefits, and family benefits. Wellness and a good work-life balance are about providing your employees with the tools they need to be happy in their job and thus much more likely to stay.

These types of initiatives can include:. Wellness and work-life balance initiatives help your employees live full and satisfying lives beyond their employment.

More interviews? Just when we were solving the turnover crisis? Stay interviews are one of the most direct and hands-on forms of employee retention in this list of strategies. Want to know what you can do to make sure you are focusing on retaining your employees? Just ask. In essence, a stay interview is a conversation between employee and manager about what makes the employee keep working for you.

Employees will take note.