High employee turnover not only affects company morale but also results in significant financial impacts for the business when accounting for the recruitment, onboarding, and training expenses of new hires. Costs to replace an employee can range from 50% to over 150% of the base salary of the exiting employee. Depending on the organization and the role of the employee, there’s a massive difference in how to calculate and account for replacement costs. Regardless of how your organization accounts for turnover when thinking about the bottom line, no company can afford to consistently train and train and train new employees... So, what can companies do to retain their top talent? Here are three best practices that can be applied to a company of any size.
1. Offer Competitive Compensation and Benefits
When employees feel valued and appreciated, they are more likely to stay with a company. Coming out of a 24 month period that included “The Great Resignation” and Quiet Quitting”, it'
s more critical now than ever that you keep your employees engaged. The data back this up. This doesn't necessarily mean your company need to offer the highest salaries in their industry, for many companies this would drive them out of business, but you must offer salaries and benefits that are in line with your competitors and market. Employers should consider offering benefits like flexible work arrangements, additional paid time off policies, and wellness programs depending on their salary capabilities.
With WFH (work from home) on the rise and the new generation of digital nomads, offering different benefits can go a long way in recruitment and overall retention. A package including benefits like WFH and additional paid time off, while a lower salary band compared to a competitor, can help land and retain top talent. Other benefits like 401k matching and/or stock options make employees them feel inclined to stay at the employer to retain the long-term benefits that come along with these options.
These benefits and more can help employees feel valued and appreciated, even if their salary isn't the highest in the industry. Consider adding routine market evaluations to your human resources schedule to ensure your compensation package matches your competition.
2. Provide Opportunities for Professional Development
Another important factor in retaining employees is providing opportunities for professional development and internal growth. Employees want to feel like they are growing in their careers and learning new skills as they add more value to the organization. Employers should offer regular training sessions, mentoring programs, and opportunities for employees to attend conferences and workshops that will help them think outside of their current job description.
For instance, imagine that you are the HR manager at a large corporation. You could offer a mentoring program where senior employees mentor junior employees. This will help junior employees learn new skills and grow in their careers, while also providing senior employees with an opportunity to give back and share their knowledge.
Every employer has a different track for promotions and professional development. However your organization and your team handles professional development, make sure you communicate this openly and honestly to all employees - especially those entering the company for the first time. Research from Glassdoor found that 61% of new hires found aspects of the new role didn’t match their expectations when joining the organization. Transparent communication can make sure every new and current employee is on the same page as your managers.
3. Foster a Positive Work Culture
Culture match is now the number 1 factor in a candidates decision making process when selecting their next role, especially for millennials and gen z. Now, more than ever, employees want to feel like they are part of a team and that their work is meaningful. Employers should encourage open communication, recognize employees' contributions, and create a fun and engaging work environment as much as possible. This is easier said than done…especially in the virtual space and as employers navigate a rapidly-changing work environment.
How your organization culture manifests to current and new employees will be unique. Understanding your culture itself can be a challenging task even before you take on the more difficult challenge of communicating and practicing that culture across your organization. Signs like high employee turnover, low conversion from job offer to job acceptance, and low employee engagement can be signs your organization is ready for a culture update.
As a leader within your organization you could encourage open communication by holding regular team meetings where employees can share their ideas and concerns, build a process to recognize employees' contributions publicly across the company, or organize team-building activities like office happy hours, banter intros in meetings, or a company softball league. Culture changes take time. Don’t be discouraged if you don’t see immediate results in your culture. Trust the process is working and do your best to support others across the organization working on positive culture shifts.
Retaining employees is crucial for the success of any company. Recruiting and hiring top talent is a difficult challenge in and of itself. By offering competitive compensation and benefits, providing opportunities for professional development, and fostering a positive work culture, you can do your best to keep top talent happy and engaged. Remember, retaining employees is not just about keeping them happy, but it's also about investing in them and investing in the future of your business. Your goal for recruitment and onboarding should be to train once and never train again.
Retaining your top employees starts at day one. Onboard the right the employees that match your culture, give them visibility to their career path in the organization, and invest in them early to hack your way into strong employee-organization fit. Get your early career matching on the path to strong retention by exploring how an Internship on Demand pre-internship can help your organization plan for tomorrow at https://www.internshipondemand.com/employers
Internship on Demand bridges the gap between college and career through hands-on work experience at today's most innovative companies. We design, build, and manage tailored pre-internships to reduce recruiting spend, cut training time, and improve intern conversion and employee retention.
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