More than 75% of employees leave due to preventable reasons, citing problems such as lack of career growth and poor work-life balance. This causes immense and needless loss to organisations.
What is the Importance of Employee Retention?
Employee turnover costs are increasing over time while the talent pool is shrinking. This makes it imperative that organisations focus on employee retention.
Since most employees leave for preventable reasons, HR leaders must make employee retention a priority.
The importance of employee retention is also reflected in monetary costs. Did you know that a leaving employee might cost the organisation as much as 2 times their salary?
Defining Employee Retention Rate
The employee retention rate is the ratio, expressed in percentage, of the number of employees leaving compared to the total number of employees at the start of a defined period.
Employee retention rate can be elevated using specific strategies.
How to Plan Employee Retention Strategies?
Employee retention strategies must follow a clear goal and be based on sound principles. One such employee retention strategy is to improve Employee Engagement.
How is Employee Engagement Related to the Retention Rate?
Did you know that the majority of employees are not engaged in their job or with their employers? This means that they may even leave their job for offers of less monetary value!
Disengaged employees are most prone to switching employers.
Targeting higher engagement increases the employee retention rate tremendously. Employee Engagement can be increased using several methods.
7 Effective Employee Retention Strategies around Employee Engagement
- Promoting Rewards and Recognition
Rewards and Recognition benefit both the engagement level in the organisation and the employee retention rate.
The most effective rewards and recognition programmes exhibit the following properties.
- They are shared right after a good deed
- They are shared frequently
- They are shared publicly
A good example is showcasing good employee performance on social media platforms and appreciating their hard work with gifts. If you want to encourage your employees with gifts, you can browse employee gifts here.
- Providing Support
The rise in the work-from-home culture has left many employees in a socially isolated spot. This may lead to deteriorating mental health.
Needless to say, the productivity of an employee rests on their physical and mental well-being.
Organisations must ensure that the mental health of employees is being taken care of. They may do this by providing employees with an in-house psychologist, for example. HR leaders may also set up timely one-on-one meetings with employees to check in on their health.
- Ensuring Smooth Onboarding
A lot of employees leave within 6 months of starting their job. Smooth onboarding is essential to ensure that the talent is retained.
Managers should optimise workload so that new employees continue to learn and stay engaged.
- Providing Pathways for Growth
According to research by the Work Institute, the number one reason for employees leaving is career development.
If there is no clear path of internal development within the organisation, employee retention will be affected. Leaders within the organisation must ensure that their workforce does not feel stuck in one place to avoid employee disengagement.
Rewarding employees with serious responsibilities will convey trust in their abilities. This can be a good method of improving employee retention.
- Offering a Flexible Work Environment
The modern workforce not only desires but also expects flexibility at work. The following ideas can be incorporated into your employee retention strategy:
- A hybrid approach to working, integrating working-from-home and working-in-office
- Flexible work hours
- A compressed and time-efficient workweek
- Showing Care
Organisations must convey to employees that their contributions are valued. Many organisations without transparent communication channels lack this quality.
The employees may end up becoming disengaged with their employers and desire change.
A good practice to show care for employees is asking for their input in team meetings. Immediate leaders may also share major decisions being made by the upper management. Transparent communication from the top down is vital in increasing the employee retention rate.
- Conducting Exit Interviews
Lastly, organisations must strive to not repeat the same mistakes.
HR leaders can incorporate the practice of exit interviews in their organisations. Create a transparent space for open communication in these interviews to receive quality feedback.
Over time, the employee retention rate will boost significantly from such practices.
Poor employee retention causes huge losses to organisations. In most cases, employees leave due to avoidable reasons. Hence, improving the employee retention rate is imperative for all modern HR leaders. They can do this by formulating employee retention strategies around increasing Employee Engagement, such as promoting a culture of recognition and supporting the mental well-being of employees.