Retaining current employees is a proactive measure employers should prioritize this year and beyond.
With employees resigning at a rate of over 4 million per month for over a year, most employers have felt the impact of the tight labor market. The cost of replacing an existing employee can run up to two times that position's salary and result in lost productivity, as well as lower morale from other employees while that position remains open, according to Gallup.
Retaining current employees is a proactive measure employers should prioritize this year and beyond. The possibilities are unlimited as to what you can offer and what your employees will find valuable.
Depending on your workforce, goals and budget, here are some ideas to consider:
1) Compensation. Compensation is a retention solution that may come to mind first, especially given the increased costs of living. However, while there may be a positive at first, the impact may be short-lived once the increase is divided per paycheck or has been long spent—especially given the increased cost of living.
Here are some ways you can improve compensation:
- Increase wages or salaries.
- Offer bonuses—“just because," performance, retention or referral.
- Offer commission opportunities.
- Restructure compensation.
2) Benefits. Employees value protections that fit their life. However, different employees have different needs, so it will be harder to find a one-size-fits-all solution. Better coverage often means more cost to the company and maybe the employees, which may limit options and participation. Also, new or changing benefit plans usually require more time and effort to research and implement.
Here are some ideas for better benefits:
- Offer additional traditional plans, like medical, dental, vision, life, short-term disability and long-term disability.
- Add creative benefits, like pet insurance, cancer coverage, long-term care insurance, college savings program, health savings accounts, or flexible spending accounts.
- Offer an employee assistance program (EAP).
- Offer a retirement savings plan or profit-sharing program.
- Increase the employer-paid portion toward premiums or 401(k) matching.
3) Time off. Small time-off policies can be easier and quicker to implement and may give more impact throughout the year as they help employees with their work-life balance. However, different employees will value different time off. Additionally, you need to make sure that this time off can be balanced with meeting operational demands.
Some additions to your time-off policy include:
- Give more paid time off, whether it's vacation, sick, personal days, holidays, or unlimited.
- Make current paid time off more flexible. For example, allow carry-over or require less notice.
- Add personal holidays so employees can recognize holidays or events that are important to their religion, culture or lifestyle without using vacation time.
- Offer unique time off, such as pet bereavement, school activities, volunteering, or blood, organ, or bone marrow donation.
4) Perks. These efforts can help employees balance their work and life demands. Some of these are low-cost and can be implemented easily, but you may need to combine them with other offerings for all employees to find some value:
- Offer healthy-at-work options: healthy snacks, vending machines, desk or office exercise equipment, or scheduled walk breaks.
- Implement socially conscious programs, like a recycling program, community service days or fundraiser walk teams.
- Offer cost- or time-savings programs, such as free or discounted parking or public transportation, warehouse store memberships, on-site car detailing, errand-runner services and vendor or supplier discounts.
- Offer life-balance perks, like gym memberships, daycare options and healthy-living programs.
Critical Steps in Creating an Effective Retention Strategy
While spontaneous perks are great, retention is not a one-time fix. It must be a strategy that is developed and changed as needed to reflect workforce trends, company needs and your employees as individuals.
Here are a few steps to take to implement retention measures:
Determine what your employees will appreciate. Get feedback from a variety of employees and managers to better understand what they want and need. Realize it may differ by department, position and employee.
Do not ask if you do not intend to do anything—this may make engagement worse if you create expectations and never follow through. If you cannot take the actions suggested, explain that, so employees know their concerns were heard.
Assess factors. Take into account operational needs, workforce structure, budget and timeline to make sure that what you offer is feasible now and, if applicable, in the future. Work out the pros and cons of each before committing.
Plan. Formalize the actions or changes you want to implement, creating policies and procedures as needed.
Announce the actions or changes to employees. Give them all the information they need to know. Use this as an opportunity to communicate your appreciation for your employees and the value they bring to the company.
Follow up. Assess if the actions or changes made the impact you wanted, or any at all. Did employees value it? Were employees able to use it or benefit from it? Did it make them want to stay? Were they more engaged?
Continue to adapt. Keep listening to employees' concerns and try to offer what you can to keep them engaged using their skills, talents and abilities for you—instead of looking for another job.
While you may not be able to find one perfect solution that all employees value, the fact that you are making an effort to show your employees your appreciation may be the best retention strategy there is. A simple and personal “thank you" can go a long way in keeping your valued employees from leaving you when you need them most.
Paige McAllister is vice president, HR compliance, Affinity HR Group, Inc. Affinity HR is the endorsed HR partner of Big “I" Hires, the Independent Insurance Agents of Virginia, Big I New York, and Big I New Jersey.
Reach out to Affinity HR Group via email or 877-660-6400 if you need help with your employee retention strategy.