In the News

Retaining Your Best And Brightest

Think of your best employee. What makes them great? Is it their performance? Their personality and attitude? Their work ethic or commitment to your business?

Now think of what would happen if they walked away. If you are like most employers, you probably have a little bit of panic at that thought. This probably has as much to do with how hard (and costly) it would be to replace them as it is how much you would personally miss them.

The best way to avoid that panic is to implement a solid employee retention plan.

 

Why retention matters

The simplest reason employee retention matters is cost—it costs a lot more to lose an employee than to keep one. The Workforce Institute indicates more than 27% of employees quit their jobs in 2019, costing the US economy $630 Billion.

The Society for Human Resources Management estimates the average per-employee cost of hiring an employee is more than $4,000 and 42 days. In addition, the process of replacing a new employee can cost you at least 50% of their annual salary. That rises if they are highly skilled or in leadership.

In addition to the hard costs of replacing a lost worker, poor employee retention costs your business in less tangible ways. The gap left by a good employee impacts teamwork and productivity among the remaining staff. Losing a long-term employee means losing their institutional knowledge unless you have a system in place to transfer that knowledge. And unhappy or under-performing employees can create morale issues on their way out the door.

Why employees leave: career development

Good pay and benefits are important, but should not be the only part of your retention plan. According to the Workforce Institute, the No. 1 reason employees quit is for career development. Most of the time, you can head off development-related departures by creating a retention plan that treats employee growth as an asset to your organization.

Career development and growth is not a one-size-fits-all retention strategy. One way is to create a culture that values learning. When you can, provide work time to engage in regular learning opportunities through industry webinars or training. In addition, consider how mentoring, knowledge sharing, collaboration and peer coaching can be both cost-effective and tells employees you value them and see their experiences as assets.

Another idea is what Google calls the 80/20 strategy—80% of your employee’s time should be spent doing the job they were hired for; the other 20% can be a passion project that will help your company. This approach fosters meaningful employee engagement as well as giving employees an opportunity to explore learning outside their job descriptions.

In order to support employee growth, not just development, create a clear path for advancement whenever possible. Recognize employees frequently and engage in regular feedback so your team members know how they are doing and what they need to do to succeed. Ask for feedback and ask your employees where they want to go in your company.

If an employee has hit a traditional ceiling—such as the top of a career ladder, full-time education or general dissatisfaction with the industry—rethink their role in the organization to recognize their contributions. This could include a new role that recognizes their experience and creates different opportunities for growth. It could also include flexible work time or taking on an advisory role while they pursue their education.

Why employees leave—work-life balance and job dissatisfaction            

People also quit because of work-life balance and overall dissatisfaction with their job. This is an important reminder of how critical it is to get the right person in the right position the first time. Focus on finding an employee who not only has the skills but who will also be a good fit for your company culture and the team they will be joining.

These reasons also highlight the value in managing your employees’ expectations and building trust. When you are hiring, be honest and transparent about the job’s expectations. Know employees’ individual goals so if a job expectation changes you can help them navigate the shift without losing them. Likewise, whenever possible work with your team to find flexible solutions when their own lives change. Finally, show your employees you trust them by asking for input and trusting them to do the job you hired them to do.

Why employees leave—poor leadership

About 12% of people left their jobs last year because of issues related to workplace culture, including unprofessionalism, employee treatment and general manager behavior. In addition, two-thirds of adults say they have left their jobs at some point because of a poor manager. Yikes.

As a business owner, you have the responsibility to ensure all leadership (including you!) are up to date on effective management skills. You also have the ability to actively cultivate a positive workplace culture where employees feel supported, trusted and engaged.

This happens through consistent and frequent communication, where employees have a chance to discuss their goals and their role in the bigger picture with their manager. Your communication should also include getting to know your employees as people and to build genuine relationships with them. Your company should also be a place of belonging, where employees feel safe enough to show up and be seen and to take risks.

It is unlikely you will achieve 100% employee retention. Even the best places to work lose employees. However, you can mitigate turnover costs through prevention measures that place a high value on employees as critical assets to your company.