Employee retention is a critical issue for companies right now; with the average employee jumping ship about every two to four years, according to a report on employee tenure from the Bureau of Labor Statistics. And, of course, we're all aware that it costs much more to hire a new employee (SHRM suggests 50-60% more than the salary of the employee you're replacing) than to retain one.
So, what's the secret recipe to retention?
Though there's (unfortunately) no set formula to offer, we do have some simple suggestions for retaining your best employees.
First and foremost, ensure your best performers are paid above-average salaries. Sure, you may argue that you don't have the funds, or your employees make a "good living" already, but the bottom line is: if your employees can make more money elsewhere, they probably will. And, if they are savvy enough to look up market rates for their position and find they are below the 50% threshold, they'll be out the door in record time. If you think you don't have the funds to pay someone what they are worth, try recruiting, onboarding, and training someone to replace them!
A second easy way to help retain your best employees is to show appreciation frequently and sincerely. This can be as simple as saying "thank you" for their hard work, recognizing employees publicly, or buying lunch for a job well-done. It can also be more extravagant, like offering a large bonus, or sending an employee and their family on an all-inclusive vacation. Obviously, the ways you show appreciation will depend on your culture and budget, but just showing you care goes a long way when it comes to employee happiness and satisfaction.
Providing flexibility is a third recommendation for retaining your best talent. Even before COVID turned our work routines upside-down, flexible work schedules were highly sought after. Now, more than ever, flexible schedules can provide a significant incentive for your best workers to stick around. If your company is not offering flexibility, I assure you that your competitors are - and that's where your employees will go!
Lastly, retaining your best employees might require you to - pause for dramatic effect - terminate your worst employees. If you've never heard the saying, "the quickest way to lose a good employee is to keep a bad one," you may want to familiarize yourself with the concept. There is nothing worse than a top performer seeing a less-than-adequate coworker not only keep his job but be entitled to the same compensation and benefits as them. What's the incentive to be a top performer if you can be mediocre (or worse) and keep your job? Not only that, but who would feel valued and respected knowing their company employs others who don't put forth the same quality efforts, or don't follow the rules, or abuses the PTO policy? If you can think of someone on your payroll that fits into the latter category, you may want to consider letting them go before you lose your best employees instead.
As much as we'd love to hold onto our best employees for the entirety of their careers, there are going to be forces out of our control that pull them away. But for everything else, retaining top talent isn't a difficult task if you pay people well and treat them right.
If you need help with compensation benchmarking, market rate reports, or any other retention strategies or materials, please allow Elevated HR the opportunity to assist you before your best employees leave your company for the next best thing!