It is reported that almost 70% of organizations indicate staff turnover has a negative impact on their bottom line. There’s the cost of recruiting, hiring, and onboarding, not to mention paying other staff overtime in some cases to make up for the work not being performed by that vacant position. It all adds up to real dollars lost.
Some models show that it can cost anywhere between 6 and 9 months of that employee’s salary, on average.
What’s even more concerning, according to the most recent annual Emerging Workforce Study by Spherion Staffing, is that 21% of employees plan to leave their jobs in the next 3 months. And 29% plan to do so in the next 12 months.
With record unemployment and over 70% of employers concerned about the talent shortage, retention is on the top of every leader’s mind. But before we get into the nuts and bolts of retention strategies, we must address the real driver behind employee retention.
The Holy Grail of retention …
The Employee Experience.
What Is the Employee Experience?
With the low rates of unemployment and changes in culture, we have seen a seismic shift from companies focusing on reasons why employees need to work versus why they want to work.
According to Bersin by Deloitte, employee experience is defined as “the sum total of all the touchpoints an employee has with his or her employer, from the time of being a candidate (active or passive) to becoming an alumnus or alumna.” McKinsey defines employee experience as “companies and their people working together to create personalized, authentic experiences that ignite passion and tap into purpose to strengthen individual, team, and company performance.”
And while the employee experience begins way before someone comes to work for your company, for the purposes of this article, we are going to focus on the experience employees have with you after they are hired.
It starts with the Job-Seeker Journey.
Much like your customers have a journey or lifecycle with your company, so too do your candidates and employees. For external marketing purposes it is common to map the journey of your customers, allowing you to find meaningful ways to engage and communicate with that target customer at every progressive stage in their relationship with your company.
Think of your candidates and employees as your internal customers. They go through a very similar journey. Which is why it’s valuable to map the journey (or experience) that employees have with your employer brand in the exact same way you do for your customers and their experience with your corporate brand.
As you can see, as the job seeker moves through their journey with your company, which, hopefully, results in them becoming hired, there are different touchpoints they will experience. If you want them to move through to loyalty and advocacy, there are certain things you will want them to experience along the way. The better experience you can provide, the more likely your ability to retain.
Easy enough, right? Maybe …
But hopefully the rest of this article will provide you with the strategies that will knock employee experience out of the park and help your company retain the talent you need to deliver an exceptional customer experience every time.
How employee experience affects customer experienceSpeaking of customer experience … what does that have to do with an article on employee retention anyway? Well, we would argue ( and we’re not alone on this one) that customer experience is one of the only competitive advantages a company has. And that experience lies 100% with your employees who are charged with delivering upon that experience. From the C-Suite to the production floor, employees hold the fate of the customer experience in their hands. But don’t take our word for it. Check out these 10 statistics about employee experience and customer experience.
“Companies that invest in the employee experience are 4 times more profitable than those that don’t.”
How employee experience affects employee retention
The employee experience affects employee engagement, which ultimately impacts employee retention. And as a bonus … mastering the employee experience, engagement and retention will also ATTRACT new employees to your company!
According to Gallup’s State of the American Workplace, “Employees who are engaged are more likely to stay with their organization, reducing overall turnover and the costs associated with it. They feel a stronger bond to their organization’s mission and purpose, making them more effective brand ambassadors. They build stronger relationships with customers, helping their company increase sales and profitability.”
Conversely, when employees are not engaged at work, they have little incentive to stay.
A well-planned and strategically implemented employee experience strategy—one that takes into consideration employee perceptions, culture, workplace environment, technology, and a consumer-style approach to HR—is certain to lead to greater levels of employee engagement, enthusiasm, involvement, and retention.
3 Reasons Why You Should Focus on Retaining Employees
Speak to any business development or sales professional and they will tell you, it’s easier to engage, retain and grow current customers/accounts versus finding new ones. The same rings true for employees. It’s easier to engage and retain your current employees versus recruiting and hiring new ones.Of course, retirement and natural employee mobility will occur, but if you can engage and retain existing employees your company and your team will enjoy:
- 20% higher productivity
- 45% less turnover
- 70% higher safety record
- 41% lower absenteeism
- 21% greater profitability
1. Unemployment is at an all-time low.
My sense is that if you’ve made it this far in the article, you are already aware of the record unemployment. With unemployment being as low as it is, employees hold all the power.
Prospects are shopping for jobs in the same way they’re shopping for a new smartphone—researching, comparing, and basing decisions on how they feel about the company offering the product. And current employees are evaluating their jobs not only on pay and benefits, but on how well the company aligns with their own beliefs or how proud they are to speak about where they work.
2. Turnover is expensive.
The cost of turnover includes lost productivity, lost profits, recruitment, training, and more. A Deloitte report found that the average cost to replace an employee is around $7,000. For large organizations with high turnover, this can quickly add up. While this number might seem reasonable, the more shocking number that is less easy to see in a financial report is the cost of lost productivity, which is estimated around $120,000 per employee. Even the loss of one employee can have an impact on the bottom line.
3. Turnover negatively impacts culture. And breeds more turnover.
Another reason to focus on retaining valuable employees is the company culture. High-turnover companies have a hard time building the culture they want because there are fewer long-term employees to demonstrate the ideal behaviors. Additionally, when employees see that others frequently leave the organization, it sets a negative tone and prompts them to question why they are staying.
And with 62% of employees only wanting to work for companies that share their passions and help them achieve their dreams and 92% being attracted to employers that help them achieve work/life balance (according to the aforementioned Spherion Staffing study), culture is more important than ever.
How to Retain Employees: 12 Strategies to Implement Right Now
The following 12 strategies will help you reduce employee turnover and retain the top talent you need for your teams and your company to grow and thrive.
1. Start with strategy.Before you start implementing ideas to retain employees, you need to have a good understanding of why employees come to work for your company in the first place. This begins with employer branding. And it relies on the alignment of your HR and Marketing departments to bring that employer brand to life and carry it out within your company and externally in the workforce marketplace.
Employer Branding by the Numbers
- According to Gallup, 36% of job seekers said a company’s employer brand is the most important consideration in a potential new job.
- 69% of Americans would not take a job with a company that had a bad reputation, even if they were unemployed, according to a Glassdoor study.
- According to that same Glassdoor study, 84% would consider leaving their current jobs if offered a role with another company that had an excellent reputation. Most people would require less than a 10% salary increase to consider such a move.
An employer brand, simply put, is a company’s reputation as an employer and the value it offers to its employees. It’s how your own employees, candidates, and even the community around you perceive your company as a place to work. Your employer brand is an important part of creating a great experience for both employees and recruits. An effective employer brand lowers the cost to attract candidates, differentiates you from your competition, and engages and retains employees at a higher rate.
Develop Employee Personas
Marketing and HR should sit down together to review, update, and/or create employee personas. The idea is to build out a description of the kind of person you need to connect with so you can tailor you message to that person’s interests, needs, and stage of life. The goal is to be as specific as possible so you can create messaging that’s more likely to speak to that person’s needs.How to craft personas could be its own article (and perhaps it will be …) but you’ll likely need to do some research, such as listening sessions with employees or one-on-one interviews, to understand why employees choose you.
The Job-Seeker (Candidate) Journey
Once you’ve identified the specific kind of person/people you are intending to reach, it only makes sense to figure out where you can reach them. Remember their journey from earlier?
HR and Marketing should take some time to map this out together so they can plan for clear, intentional communication at every touchpoint in the candidate and employee journey.
2. Plan for what success looks like. And measure it.
There’s a good chance you are already doing employee engagement surveys. If you’re not one of those companies, I’d highly recommend you work those into your operations. It’s an important method for gaining an understanding of where you stand as a company, and it’s critical in giving yourself a baseline against which to track the effectiveness of your efforts.
What gets scheduled gets done. What gets measured gets improved upon. And don’t you want to make sure the money you are investing in this initiative is well spent?
3. Be transparent during the hiring process. And hire for fit.
So this probably belongs in an article about recruitment, but I think it’s important to take a look at hiring for fit as it does affect employee retention after the employee joins your team. According to a recent Glassdoor survey, 37% of hiring managers say that new hires would stay longer if they were better informed during the hiring process.
Transparency during the hiring and onboarding process is key in finding and retaining the right kind of employees. Make sure you aren’t hiding or sugar-coating aspects of the company or the job just to get someone interested in the position.
One of the best ways to attract candidates who are likely to be a good fit is through employee referral programs. When done right, these programs can increase employee loyalty of the referrer and bring people into your company who are more likely to stay long term.
Additionally, you may want to consider using a behavior/personality/strengths assessment tool to understand a potential employee’s fit as it relates to team dynamics as well as the role for which they are applying.
4. Optimize your onboarding.
The first 90 days are crucial for employee retention. Every new hire must be set up for success from the very start (which begins well before their first day on the job!). Make sure your onboarding and orientation process is set up so the new employee learns not only about the job, but also your company’s culture.
Consider pairing new employees with a buddy or mentor in a similar role so they have a built-in support and resource outside of their direct supervisor. Make sure your onboarding experience is just as planned out as your customer experience.
5. Offer competitive salary and benefits in addition to work/life balance and other perks.
When it comes to employee retention, it’s not always about the money. But offering wages and benefits that are competitive is important. Of course employees need to have financial security (this includes salaries, health benefits and retirement), but those are table stakes in the game of employee attraction and retention.If you aren’t even in the same ballpark as your competition, your company isn’t going to get a second look from top employees. But if someone is going to join your company for 5 cents more per hour, they will leave for 5 cents more per hour. So consider some of the other perks your company can offer.
- Is it a flexible schedule?
- Performance bonuses?
- Free coffee in the break room?
- More vacation or paid time off?
- Tuition reimbursement for continuing their education?
- Onsite childcare?
Find out what your employees value and offer those additional perks to make employees feel appreciated.
6. Provide opportunities for employees to grow and develop.We’ve all seen this classic cartoon.
Everyone in the company should have a personal development plan and goals. Some may be tied to company goals and some not. There should be a clearly laid-out path for how an employee might advance their career with your company. This helps them to feel like a critical part of the company’s success and gives them purpose.
Ongoing education makes employees feel valued. It also has been proven effective in retaining top talent, maintaining quality levels, and achieving a competitive advantage.
7. Provide more frequent opportunities to give and receive feedback.Along with helping employees grow and develop, make sure you’re providing frequent feedback. But this feedback must be two ways.
- Employees want to know how they are doing. What they are doing well and what can be improved upon.
- And they want tools and resources to help them be successful in improving.
Consider revamping your review process. Check in more frequently, not just during an annual review. Think about what you are evaluating them on. Are you measuring how employees are living out your company values as well as their impact on business outcomes?
Employees are also looking for the opportunity to give you feedback. They are likely to disengage when they don’t feel their ideas or their thoughts are cared about or heard. It’s imperative to create a culture in which staff feel safe and comfortable to share feedback.
Keeping lines of communication open is critical for employee retention. This type of two-way feedback fosters a culture of transparency and builds trust.
8. Give employees the tools they need to be successful.
There is nothing more frustrating than trying to be successful in your job and not having the right tools and resources to be effective. But all too often employees are left to “figure it out.” I’m not suggesting we need to hand-hold people in order for them to be successful, but what if we asked our employees if they have the tools they need to succeed in their role?
This allows them to think critically about how they can be more effective while empowering them to take ownership. You’ll see higher levels of engagement when employees are bought in to a potential solution and part of solving the challenge at hand.
9. Focus on the development of middle managers.
As illustrated by this (perhaps overused) quote … good supervisors are critical to employee retention. Very often managers are promoted because they exceed expectations at their own jobs. But just as often, they lack true leadership skills required to engage and lead a team.
Make sure you take the time to train your management team and supervisors to utilize people skills, just as you would train them to use their technical skills. Managers need to learn new ways to encourage, motivate, and empower people with all kinds of different personality traits, and ways to work through conflict management, stress management, crisis management, and any other situations they might face.
10. Implement corporate social responsibility efforts that people can be proud of.
Corporate social responsibility (CSR) has become increasingly more important for consumers when deciding where to spend their dollars. It has become even more important for the modern job seeker to work for a company that aligns with their values and supports causes they care about. In this age of socially conscious customers and employees, if companies want to attract and retain top talent, they will need to make sure they too have a socially conscious image.
Skye Schooley, writer for the Business News Daily, notes “when initiating CSR, give your employees a voice by involving them in the decision-making process. Create an internal team to spearhead the efforts and choose an organization or cause they care about. Contributing to something your employees are passionate about can increase engagement and success. Involving your employees in the decision-making process can also bring some clarity and assurance to your team.”
Engage your employees in giving back. Let them have a voice. And then… tell others about these incredible efforts. Many companies (especially in the midwest) are too quick to stay humble and “fly under the radar” when it comes to CSR. Let me tell you, you are doing yourself, your company, your employees, and the community a disservice if you are keeping your CSR efforts quiet. Because if you don’t share (which you can do respectfully, by the way), the perception is that it isn’t happening! And that hurts recruitment and retention efforts.
11. Foster an environment of trust and respect.
According to an article in Entrepreneur, “respectful treatment of all employees” was the number-one contributor to job satisfaction. And “trust between employees and senior management” was the second.
Above all the other potential programs and perks it comes down to the simplest fact—people need to feel trust and respect in their jobs.The thing is, it’s not as easy as it sounds. Think about how your company handles its collective emotional intelligence and how that might affect trust and respect in your organization:
- Having tough conversations. Get comfortable being uncomfortable.
- Delivering the message to the right person (not around the water cooler).
- Being curious and listening attentively. Seeking to understand.
- Transparent communication, especially in times of change.
- True collaboration and teamwork.
- Caring for one another as human beings first. Take time to connect with each other.
These are all norms by which excellent companies strive to live. They work on them daily at all levels of the organization in their quest to create workplaces where employees are truly engaged.
12. Celebrate wins. Acknowledge employees. Have fun!
This one sort of speaks for itself. Human beings are wired to appreciate acknowledgement (even if it’s not publicly) and have fun. Celebrating even the small wins focuses on positivity and gratitude. And there is actual science behind the power of positivity!
So create an environment that focuses on the positive. The things that are going right. I’m not insinuating anyone ignore challenges or skip along blindly sporting their rose-colored glasses. I am merely suggesting that we try to turn our attention to the positive whenever possible and work to create an environment around us in which others feel compelled to do the same.
Employer Brand and the Employee Experience
The employee experience is finally becoming more recognized as THE way to create a competitive advantage for companies. Done well, it will result in higher engagement, which leads to higher productivity, profitability, and talent retention. That experience begins with your employee value proposition (EVP) which is, essentially, your employer brand.
It’s the promise you are making about what it’s like to work for your company. It’s why candidates will knock down your door to work at your company and why employees will dedicate their lives to continue working at your company. You must know with certainty that your EVP is something that your audience (employees and recruits) care about and that you are able to genuinely and authentically deliver on it.
If that sounds like something you want help with, that’s what we at Imaginasium do. We’ve spent decades helping companies of all kinds, with a special focus on manufacturers (who often have unique and complex business challenges to unpack), define who they are, where they’re going and why their employees and customers should be excited about it.
We drive growth for companies by simplifying their complex messages, then communicating them clearly.
We encourage you to take some time and look at our work, read our articles, watch one of our speakers, or download our comprehensive Employer Branding e-Book to see how we approach this kind of work.