Retention Strategies to Keep Your Talent
In today’s competitive job market, hiring great talent is only half the battle. Retaining valuable employees is also crucial for long-term success. Recent surveys and market trends paint a challenging picture for employers: from the Great Reshuffle to ongoing baby boomer retirements, to social media-fueled phenomena like rage applying. Some degree of turnover is inevitable, but organizations have the opportunity to create a work environment where people thrive and want to stick around.
The Cost of High Turnover
High turnover can have many negative impacts on your company and team:
1. Financial cost
According to Gallup, the cost of replacing an employee can range from one-half to two times the employee’s annual salary (and that’s a conservative estimate, it can be higher especially for more senior or specialized positions).
2. Team morale
Frequent departures can negatively affect engagement, satisfaction and morale among remaining employees:
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- They can feel overworked or burned out if they’re covering responsibilities left by exiting staff
- They may start questioning their own job satisfaction or feel uncertain about the future of the company
- Frequent staff changes can make it difficult to maintain a consistent company culture
3. Effort to replace staff
Hiring takes time and resources, especially if you’re constantly replacing a revolving door of staff. Writing job descriptions, screening resumes, conducting interviews and checking references all divert attention away from your core business activities. And if your company starts to get a reputation for high turnover, you may struggle to attract talent.
Of course you can outsource your recruiting to an agency, shifting the time and energy to a third party, but you are still taking the budget hit.
4. Loss of productivity and corporate knowledge
Losing good people through resignations or retirements can mean losing your top innovators, producers and problem-solvers, who also often have valuable institutional knowledge and expertise. This loss can disrupt productivity, workflows and customer service.
5. Client relationships
In client -facing roles, high turnover can damage relationships and customer loyalty. It can be frustrating for clients to have to repeatedly build rapport with new employees, and if they have established strong relationships with your departing staff, they may choose to follow them with their business.
Start with a Benchmark
If you plan to work on improving retention, you’ll want to track your progress. To do that, you need to start with a benchmark—i.e. how good is your retention currently?
You can calculate employee retention rate by subtracting how many employees left the organization from the total number of employees, and then dividing that by the total number of employees (see calculation details and examples provided by AIHR). You may also wish to break this down further by department, manager or specific demographics to gain deeper insight (AIHR provides a list of other retention metrics to consider).
Once you know your current retention rate, you can build a system to track your success over time.
Retention Strategies
1. Hiring the Right Fit
Making the right hire from the beginning can go a long way in improving retention. When candidates have the right skills and are well-aligned with your corporate culture, they’re more likely to be successful in the role and to build relationships within the team, leading to higher job satisfaction. If you need help in this area, hiring for ‘fit’ is what we do best!
2. Effective Onboarding
According to the Wynhurst Group, new employees who went through a structured onboarding program were 58% more likely to be with the organization after three years.
Onboarding is most effective when it is intentional, collaborative and managed over the span of the first year as your new employee evolves in the job. If you need support developing an onboarding program, you can download our Onboarding Guide for tips, suggestions and templates.
3. Check in with Your Team
Stay connected and check in with your to your team:
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- Regular check-ins will help you detect and resolve issues or concerns early.
- Open communication channels make employees feel heard and valued.
- Connecting one-on-one allows you to provide tailored support and address individual needs and challenges.
- Periodically conducting more formal employee engagement surveys will help you evaluate engagement and job satisfaction across the organization. Anonymous surveys also allow employees to bring forward concerns they may not be comfortable discussing directly.
4. Recognition
According to Gallup, it’s not uncommon for employees to feel that their best efforts are routinely ignored, and employees who don’t feel adequately recognized are twice as likely to say they’ll quit in the next year.
Regular recognition of your team can provide motivation, a sense of accomplishment and more job fulfillment. There are a variety of ways to recognize employees but if you aren’t sure what types of recognition would resonate with your team, you can ask them! Find out in one-on-one conversations or include it as part of employee engagement surveys (see #3 above).
5. Compensation & Meaningful Benefits
Compensation is always a major reason why people change jobs, and while other factors contribute to turnover, salaries are still the biggest driver of turnover.
Evaluate compensation and benefits within your organization and compare them to what is competitive in the market and to what your employees are telling you they want (see #3 above). This can include (but is not limited to):
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- Wages and commissions
- Health benefits
- Vacation and other time off
- Parental leave
- Bonuses, equity, profit sharing
- Pension plan or RRSP matching
- Paid parking or public transportation allowance
- Technology or home office stipends
- Wellness allowances or company-paid gym memberships
- Volunteer time off or charitable donation matching
6. Upskilling & Professional Development
Upskilling and professional development can improve job satisfaction, increase engagement and help people feel valued by their employer. Training and learning should be ongoing for all team members, not just new hires.
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- Build intentional upskilling plans
- Coordinate mentorship and coaching
- Bring in experts to deliver sessions for your team
- Pay for employees to attend conferences and seminars
- Offer tuition reimbursement for courses or postsecondary programs
- Facilitate opportunities for workers to participate in exciting projects
As you grow the skills and abilities of your team, you are helping them be more successful in their job, and potentially preparing them for internal mobility and leadership roles. If there are opportunities and a clear path for staff to grow, they are more likely to stay within the organization, rather than leave for a new challenge.
7. Corporate Culture
There are many facets that can make up a positive corporate culture, but everything begins with treating your people with respect. Leading with empathy and making compassionate decisions that prioritize the wellbeing of your team will build a strong foundation. From there, you can layer in elements that fit your organization, such as:
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- Encouraging work-life balance
- Fostering a mentorship culture
- Providing support to build workplace resilience
- Prioritizing internal collaboration over competition
- Building an inclusive work environment
- Offering flexibility – remote or hybrid work, compressed work weeks, flexible hours or breaks, job sharing, gradual retirements, sabbaticals, etc.
The key to success is putting these elements into tangible practice, rather than empty platitudes. For example, employees will quickly see through a manager who talks all about work-life balance while simultaneously creating conditions that make that impossible.
8. Invest in Tools for Success
Invest in the technologies and tools that your team needs for success. Inefficient or outdated systems can be a major source of frustration, whereas the right technology boosts productivity and allows your team to focus on more creative and meaningful work, rather than fighting with finicky systems. Listen to your frontline staff and day-to-day users—they’ll know best what is working and what isn’t!
9. Meaningful Work
Research has shown that meaningfulness is more important to employees than any other aspect of work. When work is meaningful, employees are more engaged, committed and satisfied; and when it is not, they’re more willing to leave. All generations report wanting meaningful work, but this is especially true for Millennials and Gen Z workers, many of whom say they would trade a raise for a position where they can make a greater impact.
Help employees find meaning by:
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- Connecting their role to the bigger picture; help them see how their work contributes to the company’s mission and impacts clients or society
- Getting to know your individual employees and link their work to their personal values and goals
- Fostering teamwork and collaboration
- Empowering employees with autonomy, coaching and growth
Ongoing & Adaptable Strategies
Retention strategies should be ongoing and adaptable, not a “set it and forget it” policy. Make a plan to periodically revisit your retention metrics and adjust your strategy as needed.
When Turnover Does Happen
Even if you craft the perfect retention strategy, it is inevitable that some amount of turnover will still happen. Planning for vacancies will help you manage turnover, retain key institutional knowledge and mitigate negative impacts. Here are some resources to assist:
- Succession Planning
- How Successful Managers Handle Employee Turnover
- Prepare for Employee Turnover – Reduce Gaps and Delays by Planning for Vacancies
Retention Starts with Making Great Hires
Making great hires is the first step in improving retention. Here at The Headhunters, we actively headhunt, which enables us to find candidates with the right skills and personality to fit your team, rather than relying solely on inbound applications. Our Workstyle and Performance Profile is a hiring assessment tool that helps us take the guesswork out of finding ‘fit’ and has been proven to help reduce turnover.
