With a new year upon us, your attention is likely focused on setting financial and productivity goals for your business. As you plan, make sure to take a look at one area you may have overlooked: employee retention. While it may not be immediately obvious, employee retention has a huge impact on your bottom line--and now is a great time to make some employee retention resolutions that will pay off all year long.
Poor employee retention can be a pricey problem for any business. High turnover rates result in lost productivity and additional expenses such as recruiting, hiring, and training replacement employees. A general guideline is that replacing an employee who voluntarily leaves costs about 25 percent of that position’s total salary and benefits. Using these multipliers, an employee earning a salary of $50,000 a year could cost more than $16,000 to replace. That’s not a cost you want to regularly absorb, so consider making retention a priority with these ten resolutions.
1. Hire Smart. Taking the time to draft job descriptions, recruit candidates, and interview thoroughly will pay off. You’ll find employees who are a good fit for the position and the unique culture of your company or organization.
2. Offer a Fair and Competitive Compensation Package. Know the norm for the position, your industry, and your area of the country. Do your research ahead of time as you hire employees.
3. Develop an Attractive Benefits Program. To the greatest extent you can, offer an attractive benefits program, including items such as medical insurance, a 401(k) or other retirement savings plan, or even perks such as subsidized health club memberships.
4 Train and Mentor Your Employees. Help them set goals for both their role in the company and overall career, and provide support to help them get there. This can include formal training as well as opportunities to participate in professional organizations or industry seminars.
5. Promote Work/Life Balance. This can take the form of flexible work hours or even the ability to work at home for some positions. As you structure your paid time off policies, make sure to allot discretionary time that employees can use to manage personal issues.
6. Recognize Employee Achievements. Acknowledge employee achievements and contributions that go over and above regular job performance. You can do this through regular, formal programs, such as “Employee of the Month,” or on an ad hoc basis. Communicate your employee’s outstanding performance to the rest of your team, and offer a token award or prize.
7. Provide Leadership Opportunities. Leadership opportunities are great motivators for empowering employees and increasing satisfaction. Give your employees the chance to take ownership of projects and to be engaged at higher, strategic levels when possible.
8. Offer Regular Feedback. Offer regular feedback throughout the year on performance rather than holding it all for the formal review. This gives your employees the opportunity to change or amend any shortfalls or issues, and reduces the likelihood that they will be unpleasantly surprised at review time.
9. Conduct Employee Surveys. Solicit feedback from employees through such means as employee attitude surveys where employees can give confidential feedback on their opinions of your company in terms of satisfaction with the job, and suggestions on how their jobs and work environment might be improved. To help build a relationship of integrity and trust among company employees, the results of your survey should be communicated effectively and acted upon by your company.
10. Foster Teamwork. You can engage in formal team-building training at work, or coordinate outside opportunities such as a company softball league or recreational outings.
While it may not be practical to implement all of these retention strategies at your workplace, anything you do to make employee retention a priority will pay off in a more engaged, satisfied, and loyal workforce. To learn more about the hiring process, crafting a competitive salary package, and conducting performance reviews, visit us online at HR360.com.