Keeping Your Talent: Employee Retention
As many organizations emerge from the recession, their leaders are concerned with retaining employees, especially high performers. Employee retention impacts bottom line results and therefore it’s critical that leadership teams understand how valuable it is to retain the right employees and how they can improve employee retention.
The cost of replacing an employee who leaves your organization can often be quite expensive, ranging between 50-300% of the employee’s salary. If you can keep employees longer, you will be able reducing your cost to hire and the costs of getting new employees up to speed.
With an ageing workforce, it becomes increasingly important to focus on employee retention so as to tap into their knowledge and expertise and minimize workforce gaps. Keeping experienced workers within your organization longer is often the key to sustainable business success.
How Can You Improve Employee Retention at Your Organization?
Open, honest and forthcoming with information
Motives and intentions are obvious
Shares information with all levels within the organization
Highlights how individual roles, responsibilities and/or accountabilities are impacted
Actively listens to its employee groups and commits to taking action in a timely manner
Communicates what can and cannot be done to meet employee expectations
Proactively manages expectations
Views each employee as an investor
Negotiates a ‘win-win’ relationship with employee groups and individual employees
Leaders and managers are part of the team, not outside of it
The classic method of retaining employees has traditionally been through increased salaries and bonuses. In this method, employees who are unhappy, or who have voiced that they would like to leave, are offered more money to stay.
Obviously this can become quite expensive and it’s not a sustainable strategy over the long term.
So how can you more effectively keep employees? Your ability to retain employees is linked to your ability to engage employees.
To increase retention, we recommend executing a total reward strategy (a blend of financial and non-financial rewards) as well as recognition programs that are robust and inclusive of all levels and roles. The execution of a well-constructed retention strategy will demonstrate transparency, responsiveness and partnering.
A Total Rewards Program for Employee Retention
There are a number of key aspects of an effective total rewards program. By implementing such a program you will make it easier and more financially affordable to retain employees. Total rewards programs feature the following aspects:
- Holistic: They offer a range of financial and non-financial rewards
- Best fit: They are tailored to your organization’s culture, structure, work processes and business objectives
- Integrative: The program is integrated with other human resource policies and practices
- Strategic: The program rewards activities, behaviours and values that support your strategic business goals and objectives
- People-centered: They focus on what employees value in the work environment
- Customized: They provide a flexible mix of rewards that offers choice and is aligned to generational preferences
- Distinctive: They are unique and differentiate your employment brand from your competitors
- Execution: They require consistent execution by managers at all levels
- Communication: The features and benefits of the program are frequently communicated to employees.
These characteristics ensure that your program engages your employees and that it is transparent through strong communication and consistent execution. A robust total rewards program is also responsive, as it solicits and takes into account different elements that employee groups think are important. Finally, it fosters a partnering environment because the program contains a range of customizable options.
Implementing a total rewards program will allow you to retain employees in a practical, affordable way that is good for business.