Employee retention is one of the greatest challenges facing employers today. Companies faced with a high turnover rate lose tribal company knowledge, as well as training time and investment. They may also have to undergo a costly candidate search. A high employee turnover rate can cost twice an employee’s salary to find and train a replacement.
As a compensation professional, I often received requests from managers to put together a retention package. While throwing money at the problem may solve the immediate retention concern, it does not solve the underlying reason why employees choose to leave a company in the first place. It’s important to take the time to learn the reasons for employee departures.
Top Reasons Employees Leave
- Manager. Employees leave managers since they feel unappreciated, have lack of clarity about expectations, and/or do not believe there is a framework within which they can succeed.
- Lack of Opportunity for Advancement. Advancement doesn’t necessarily mean promotion. Employees want personal and professional growth opportunities.
- Lack of Work-Life Balance. Workers from Generations X, Y and Z will continue to insist on having more time outside of work to live their lives.
- Unable to Speak Freely. Employees want to contribute new ideas. If they feel they must bite their tongues or find themselves constantly in trouble, they will find another company where they can express themselves.
After learning the reasons for employee departures at your firm, you’ll be armed with data to help form a comprehensive employee retention strategy.
Top 5 Employee Retention Strategies
- Hire the Right People. Invest time upfront to find the right match between candidates and your organization and team. Besides technical knowledge, make sure the candidate fits with and compliments other team members.
- Ensure the Compensation & Benefits Package is Market Competitive. While many employees cite career development and other factors higher than pay on importance, a market competitive compensation and benefits package still counts.
- Ask Employees What Motivates Them. Employees are motivated by different things. Don’t assume a one-size-fits-all approach will work for the whole team. Ask your employees what gets them excited about their job and what aspirations they may have. Find opportunities where they can get involved in these areas.
- Listen. Ask your employees on a regular basis how they’re doing and what suggestions or feedback they may have. Most of all – LISTEN! This is very hard for many managers to do. As the old saying goes: “two heads are better than one.”
- Empower Employees to do their Best. Provide the leadership, resources, and training for them to realize their potential.
It’s time companies’ shift from “reactive retention” to “proactive engagement”. It’s much easier – and less expensive — to retain employees who are engaged and committed to your company’s success.
Nancy Ellington is a Managing Partner with Alliance Compensation LLC, a team of seasoned experts and trusted solution for clients across the Western US in public and private companies. She has over 30 years of experience in corporate leadership roles and consulting, and lives with her husband and two kids in Redmond, WA.