Employee retention has a huge impact on your bottom line. According to Gallup, it costs one half to two times an employee’s annual salary to replace them depending on their level of seniority. The costs include:
- Lack of output while the role is unfilled.
- Recruitment and selection costs.
- Training and on-boarding costs.
- Lost productivity while the replacement gets up to speed.
As a result, turnover can cost your company tens of thousands of dollars annually. Here are six research-backed employee retention strategies that will help you reduce turnover costs and become an increasingly great place to work.
1) Provide Abundant Professional Development Opportunities
According to TINYpulse, employees are 20% more likely to stay at their jobs if they feel like they’re making meaningful strides in their careers. To capitalize on this motivator, you need to provide an abundance of professional development opportunities including:
- Meeting with your employees at least twice a year to discuss their long-term goals. Understanding their ambitions lets you tailor their projects to their interests which increases their retention rate.
- Give them lots of opportunities to work on challenging projects. This keeps work interesting and allows employees to grow within their roles.
- Provide ongoing training. This can include frequent cross-training, access to learning platforms like LinkedIn learning, a stipend for college courses, or any offering that gives employees access to regular training.
Giving employees lots of opportunities to expand their role within your company improves retention since they don’t feel like they have to find a new job to grow as a professional.
2) Set Clear, Prioritized Expectations
Gallup found that 38% of employees whose managers sets priorities with them are engaged compared to 4% who don’t. Good employees want to succeed and, to do so, they need their managers to be clear about what success looks like.
- Meet with employees 1:1 at least once a month to discuss their top priorities. Not only does this help your team feel confident about what they’re working on, it also keeps you updated on their workload so you can keep it manageable.
- When you assign projects, provide clear KPIs and any other guidelines you expect to be followed. Removing ambiguity boosts morale by helping employees get projects done right the first time.
- Provide feedback that’s consistent in both frequency and message. There are few things more frustrating for an employee than having a manager who refuses to provide feedback or who gives contradictory feedback at different stages of a project.
Setting clear expectations is great for employee retention and performance since your whole team is aligned on what they’re striving for.
3) Ensure Manager Performance is High
A TINYpulse report found that 40% of employees who rate their manager’s performance poorly are likely to look for another job compared to 10% who rate their manager’s performance highly. Employees judge their managers on both their leadership performance including demoralizing behavior including:
- Using an aggressive communication style (ex. Yelling, making harsh accusations, giving ultimatums, etc.)
- Being unable to provide clear project requirements
- Failing to provide valuable feedback
And failing to be a role model on how to execute their team’s responsibilities including:
- Being unable to answer questions and help the employee solve problems
- Failing their own projects
- Lacking an understanding of the work employees are doing
Employees want their managers to be someone they look up to. When employees feel like they can’t turn to their managers for help because they’re rude and/or incompetent it’s demoralizing since they feel like they’re managing themselves without any of the benefits of being a manager.
To prevent bad bosses from driving away your employees, you need to ensure your managers are well-trained and are experts in their field. If your industry changes often, have your managers attend conferences, webinars, short courses and other events so they are aware of the latest techniques and best practices.
4) Foster a Strong Sense of Purpose
Research shows that employees who believe their work is a calling are more satisfied than those who work just to get a paycheck. This is intuitive, however, most managers don’t attempt to foster purpose since they think it’s tied to specific roles and that some jobs just aren’t meaningful.
To improve employee retention, you need to abandon that belief and create a culture where every role has a strong sense of purpose.
- During the on-boarding process, tell every employee about the impact that their role has. Even if it’s indirect, like an assistant who helps keep the business running smoothly, share a meaningful message about each role.
- Learn what makes work meaningful for each of your direct reports. Purpose is different for everyone. For some, it’s doing work that contributes to a cause, for others it’s being able to provide for their families, and some find meaning in being around a great group of people. Knowing what matters to your employees lets you maximize their sense of purpose at work.
- On at least a quarterly basis, share the impact your company has on your customers and/or your broader community. Seeing results from their work is an easy way to improve employee retention and motivation.
Fostering a strong sense of purpose creates a workforce that’s engaged, has a higher retention rate and is committed to helping your company succeed.
5) Create Corporate Social Responsibility Programs that Employees Can Participate In
Just as employees want a sense of purpose in their work, they also want to know that their companies are committed to the greater good. Interactive corporate social responsibility programs are an effective employee retention tool. Studies show that companies who implement sustained and highly visible CSR programs can reduce turnover by up to 50% and increase engagement by up to 7.5%.
Launching a corporate social responsibility program doesn’t have to be extremely expensive or time-consuming. Here are some initiatives that require minimal effort to launch:
- Arranging group volunteer outings.
- Offering paid time off to volunteer.
- Letting employees use company software and other tools to do pro bono work for nonprofits.
- Offering donation matching.
- Letting employees vote to decide which causes your company supports.
- Encouraging employees to pitch their own initiatives.
With today’s passionate and socially aware workforce, employee retention is as much about being an honorable company as it is creating a great environment to work in.
6) Make It Possible for Employees to Use Their PTO
A study from Glassdoor found that American employees only use about half of their vacation days and 66% of them work while on vacation. They want breaks from work but feel like they can’t since 29% of people report receiving emails from colleagues and 25% receive emails from their boss.
According to the American Psychological Association, vacations improve retention and performance by:
- Reducing stress levels and improving overall mental health.
- Improving productivity since people return from vacation feeling more creative and energized.
- Boosts happiness and life satisfaction by giving people a greater sense of work-life balance.
Here’s how you can empower employees to use their PTO and come back refreshed:
- Set a policy of not sending messages to people when they’re on vacation. This policy allows people to fully unplug while they’re away which is critical for them to get the benefits.
- Encourage employees to cover for each other. One of the biggest concerns that people have about taking time off is that their projects are going to fall apart while they’re away and it’s going to be incredibly difficult to recover. Setting the expectation that teammates need to cover for each other relieves that fear.
- Encourage employees to use their PTO. Some people avoid using their PTO because they fear being judged, missing out on opportunities or facing other negative consequences. To resolve this fear, track your employees’ days off and if it’s getting to the end of the year and some people have used few, if any, of their days off, encourage them to take a vacation.
Creating a culture where people feel safe to take vacations is an easy way to retain your best employees and prevent them from burning out.
Give Your Employees the Gift of Productivity
One of the most meaningful ways to show your employees you appreciate them is by giving them more time to focus on the work they love. Learn how to give your employees the gift of productivity by checking out our free guide How to Give Your Team Leverage with Virtual Assistants. In it, you'll learn:
- What kinds of time-saving tasks your team can offload
- How we work with you to maximize the ROI of our service
- Our process for securely leveraging your systems