A retention strategy is a plan that all organizations and leaders should design. Why? Because in 2021, the US national average for turnover was over 47%. Of course, that number includes those who were let go, so let’s examine the numbers for voluntary turnover. Since 70% of all turnover is voluntary, the voluntary turnover rate in 2021 was nearly 33%.
If you don’t speak business, this means that 33% of your employees left the organization within a year. If you employ 50 people, 16-17 people leave the organization annually. If you employ 1000 people, 330 quit your company. That’s a lot! That’s when you should truly have a retention strategy created – or redesigned if the one you have isn’t working.
What is a Retention Strategy?
A retention strategy is a plan put in place to reduce turnover within an organization. It commonly addresses the issues that result in voluntary turnover, including engagement concerns, leadership issues, and more. A retention strategy is vital to organizations and industries that suffer from moderate to high turnover.
Why Do Organizations Benefit from a Retention Strategy?
The benefit of a retention strategy comes from a number of factors, not just increasing retention. In truth, an effective retention strategy aids in reducing hiring and training costs, boosting productivity among employees, and creating more robust engagement. Organizations create happier employees by creating a plan to keep employees within the organization.
What Considerations Should Be Made in a Retention Strategy?
While a retention strategy is a good idea, it is never ideal to go into it blind. Why are people leaving? It’s different for many organizations, although it’s typically a few things that push employees over the edge. There are a handful of the most common drivers in turnover and turnover intention.
Although you could base a retention strategy on what’s most common, it won’t be a fantastic fit unless you dig a little deeper. Exit interviews are ideal ways to gather turnover information, as employees who are leaving are willing to be honest about the problems they experienced.
Leaders must examine turnover intention as something to be studied. Accepting it and hiring someone new isn’t going to solve the problem if it is recurring. Find out why it’s happening, and you can develop a plan to prevent it.
What Drives Employees Away?
So, what are the prominent driving factors in turnover? These are the most common reasons for employee turnover in all industries:
- Compensation and benefits
- Career advancement
- Poor leadership
- Flexibility options
- Unrealistic expectations
Does your organization need help with these areas? If so, it’s time to plan a retention strategy combating them. If not, what is driving good people away? It’s time to start your research!
Retention Strategies Worth Considering
When you’re prepared for a retention strategy, the following 13 exceptional methods can assist your plan design.
Quality Onboarding
What is your onboarding or orientation process like? It could be that it fails to prepare people for the reality of the job. If you hear “it wasn’t what I expected” in exit interviews, you may need to make significant changes to onboarding.
One of the biggest changes is this: don’t wait until someone accepts a job to offer onboarding. An organization offering an integrated recruitment and onboarding process has a better chance of filling the position with the right person. Hiring the right people for the job is essential to increasing retention. When you put the wrong people in the job, turnover spikes.
Fair Compensation
Did you know that most organizations with a compensation issue would need to increase pay by a MINIMUM of 8% to see a change in turnover? So, if compensation is the driving factor in your company’s high turnover rate, you must take it seriously in your retention strategy. Increasing salaries by a few percentage points won’t do much of anything.
Most good employees know their worth. They know when they aren’t compensated fairly. So, pay fairly.
Additional Benefits
Have you ever paid a substantial amount of money for insurance premiums and then got slapped with an insane hospital bill? I sure have! Of course, you can read all the benefits when you sign up, but most people never plan on big medical events…until needed.
Good benefits are necessary for many employees to feel valued. Sometimes that means benefits that the organization doesn’t currently offer. Other times it means obtaining high-quality insurance. If benefits are discovered to be the retention issue, it’s time to create a retention strategy involving additional benefits.
Outstanding Organizational Communication
An organization with sub-par communication is a stress-ridden organization. Could you relate to an employee who is receiving different instructions and communication from various departments? Organizations must focus on improving communication to combat turnover stemming from this kind of stress.
Communication training is no small beast. You can’t send employees to a communication seminar for a few hours and expect all problems to be magically solved. In fact, a few days of training will not make a huge dent. However, it is a start. Communication must be an ongoing training process.
Stellar Teamwork
Often, in an attempt to motivate people, leaders create competition among coworkers. While a bit of competition does drive some employees, it puts a wedge in the teamwork aspect of the organization. When teamwork is stunted, those who dislike working against their coworkers will leave the organization.
Studies have shown that teamwork and working together toward a common goal is far more effective in productivity and loyalty. Cut out the competition in the workplace and create an environment where employees thrive alongside each other.
Good Use of Feedback
Too often, employees don’t know how they can improve and do better because the feedback is lacking. When they are missing the mark and are only told, “keep trying,” they don’t learn from any mistakes because no one tells them the mistakes. Of course, some mistakes are obvious. However, many mistakes are only noticed by an experienced leader.
Leaders, give feedback and give it well. That’s a retention strategy worth employing.
Appreciation and Gratitude
How often do you thank people for doing their jobs? It’s time to start. Too many organizations think that pay is thanks enough. While people obviously work for their pay more than gratitude, it’s still nice to be appreciated for all the effort.
Thank you notes, complimenting someone’s work in the hall, and acknowledging small successes on a project are all ways to express employee appreciation and gratitude. Recognition is included in this, but know your people well enough to understand their preferred method. A public announcement might be perfect for one person but cause embarrassment for another. Express gratitude in a way that allows the team members to thrive.
Work-Life Balance
Most people work to live, not live to work. This means a work-life balance (if you can even call it that) is imperative. When people are at home, let them be at home. Calling employees on their day off, expecting replies to emails, and other forms of work during off hours should be nonexistent.
Providing a work-life balance requires clear boundaries. Putting those boundaries in place protects the people from extra, (potentially) unpaid work and increases the organization’s productivity.
Ongoing Training
Far too many organizations train new employees and leave it at that. There must be a focus on ongoing training and development. And I don’t mean the harassment training or similar required meetings. Instead, invest in employees’ skills.
Leadership training, soft skills training, and other options encourage employees to better themselves as professionals and tell employees that they are worth educating. It is a form of valuing people.
Flexibility or Work From Home Options
Many people enjoy going to work in an office or physical location, but others prefer the flexibility of working from home. Some employees like the hybrid option. No matter which option is preferred, employers must allow employees to have the flexibility to choose what their work location and schedule look like.
While it is unlikely that schedule flexibility is possible in some industries, it is vital to consider team members’ desires and preferences. Flexibility can be a major component of turnover, and a great strategy involving flexibility is a potential solution to the problem.
Positive Culture
Have you ever worked in a difficult environment simply because of the culture? The work was enjoyable, but the way things happened was less so.
That’s one reason many people leave their jobs. I left a sales management job for this reason. It was enjoyable, and I loved my work at one time, but then a few people were replaced, and the culture changed altogether. I didn’t last much longer.
Organizations and leaders can retain good employees for longer by creating a more positive culture.
Wellness Initiatives
I’ve worked for numerous organizations where certain “wellness” programs were available. However, there was always some kind of catch to it. Extra costs, specific stipulations, and other issues were standard. If you’re going to include wellness initiatives and programs in your retention strategy, you must do it right.
Wellness programs work when organizations have the right mindset toward them. Providing free fruit instead of junk-food-packed vending machines, getting involved in marathons or similar exercise events, and other initiatives are great ways to implement wellness into the organization and show team members they are valued.
Empathetic Leadership
Have you ever heard that people don’t quit their job; they quit their bosses? While some people quit because of the job, many leave because of poor leadership. Leadership contributes to many of the components involved in turnover and retention strategies. To improve retention and mitigate turnover intention, leaders must be empathetic.
Treating team members with respect and care is vital. Employees are not machines and should not be treated as such. By implementing quality leadership, organizations have a greater chance at high retention levels.
How to Design an Effective Retention Strategy
Designing an effective retention strategy requires knowledge first. While each of the suggested 13 retention strategies could impact retention, it is important to prioritize and change the most necessary components. Employing a retention strategy requires time and effort.
If organizations were to work toward every retention strategy at once, it would be spread too thin. Designing a retention strategy requires a clear-cut plan after knowing the causes of high turnover rates. Going in blind can be a tough battle; being prepared is far more effective.
Design an effective retention strategy based on research and watch your turnover rate decline.