Motivation, engagement and retention are all closely knit factors in the health of any workplace. Employee retention is distinctive because improving it typically means focusing on your organization’s top performers.
Your best employees are most likely to have an eye on outside job opportunities — because they can. They’re smart, creative and hardworking, but if they don’t feel connected to the business or challenged in their work, other companies will snap them up.
Even if an employee wants to stay, he or she may not be aware of advancement opportunities. Elena Bajic, founder and CEO of Ivy Exec, discovered this the hard way when a dedicated employee left. She reflected later in a Forbes article what she learned from the employee’s departure.
I was surprised that she didn’t think to ask if there were internal positions that could give her a similar opportunity. […] I reached out to her thinking she might have been unhappy and that prompted her to leave. As it turned out, she was very happy at Ivy Exec — she just never thought a similar opportunity existed at the company. We shared an “Ah ha!” moment when we realized we’d both made a mistake: she hadn’t shared her career aspirations with us, and we hadn’t made it clear enough that it’s OK to have a two way dialog about career goals.
Mistakes like this are a financial drain, estimated at costing an organization from tens of thousands of dollars to 250 percent of the employee’s annual salary. Josh Bersin, of Bersin by Deloitte, writes in a LinkedIn post that this cost includes hiring expenses for a new employee, training time, lost productivity and lost engagement across a company and the cost of any errors made by the replacement employee as he or she learns the job.
Ultimately, retention is about the success of your business. Bersin concludes that “only by making your employees happy can you ultimately make your customers happy.”
Let’s look at five key strategies for better employee retention, and why they work.
1. Hire Smart by Being Honest About the Job
If you hire people under false pretenses, they’ll leave sooner rather than later. Don’t be afraid to be honest about what you need and what the job entails. Bersin writes, “Are you attracting the ‘right people’ for each job? Some jobs are particularly demanding (ie. consulting roles where travel is intense). If you honestly explain these roles and their positives and negatives you will attract people that ‘fit.’ If you over-sell the job you’ll suffer high turnover.”
2. Do Face-to-Face Communication
This was the hard lesson Bajic of Ivy Exec learned: if she’d had better communication with the employee who left, that employee likely would’ve stayed. Bajic cites studies that show a large percentage of our communication, up to 90 percent, is shared via nonverbal cues. “Face time, however scarce, is an immensely important factor in communicating well and establishing trust. If you are managing employees in remote locations, try to meet with them in person on a regular basis — maybe not monthly — but at least 2 to 3 times per year,” Bajic advises.
3. Encourage Friendships
Cultivating friendships at work used to be frowned upon. Now it’s viewed as an asset. A happy workplace begins with a happy workforce. Employees who feel connected to the people they work with, to the point of building deep friendships that continue outside of work, are more likely to be satisfied with their jobs.
Forbes writer Dorie Clark says workplace friendships are key to an overall workplace culture of teamwork and appreciation. “Close friendships at work have business advantages, such as increased productivity and employee retention. According to a study in the Journal of Business Psychology by Christine Riordan, Ph. D., workers report higher job satisfaction when they feel they have even the opportunity for friendships.”
4. Pay People to Quit* (*Please Don’t Take This Offer)
Amazon CEO Jeff Bezos, in his annual letter to shareholders last month, announced the company will offer to pay up to $5,000 to any employee who decides to quit. (The policy is inspired by a similar one at the Amazon-owned shoe retailer Zappos.)
The “Pay to Quit” offer isn’t so crazy once you hear Bezos’ reasoning: “The headline on the offer is ‘Please Don’t Take This Offer.’ We hope they don’t take the offer; we want them to stay. Why do we make this offer? The goal is to encourage folks to take a moment and think about what they really want. In the long run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.”
It may be flashy, but the “Pay to Quit” offer has gotten the retail giant lots of attention and sparked an important conversation around employee retention, engagement and dedication.
5. Show Appreciation Early and Often
This is the biggie. Employees who don’t feel appreciated don’t last long. Sharon Daniels writes for Harvard Business Review, “Growth and recognition are particularly important to younger workers, who have higher expectations of their employers than others do and are defecting in large numbers. Regrettably, too many managers unwittingly encourage employees to walk out because they regard them as replaceable cogs in a wheel.”
Personalized, frequent recognition should be based on job performance and can be as simple as saying “thank you” for a project well-done or sharing a small, unexpected gift for great work. It builds loyalty and lets employees know they’re valued and wanted. Employees who feel wanted return the favor.
For more on fostering a lasting culture of appreciation in your workplace, download our FREE Guide to Workplace Gratitude.
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