You’ve probably heard that people are a company’s most valuable asset. And if this is the case, you’d want to retain your best assets onboard for as long as possible. The goal is to help them reach their full potential and, in the process, empower them to contribute to the business’ growth.
In this article, we’ll discuss what is employee retention and why it’s important to any venture, big or small. We’ll also tackle a few ways to retain employees in your organization better.
What Is Employee Retention?
Before anything else, let’s clarify this – what is employee retention? The best employee retention definition by authors describes it as the organization’s capability to maintain its workforce.
When you have excellent employee retention, people choose to stay within the company without actively looking for other job prospects. In short, they don’t quit their jobs, and they stick to the company for a longer period.
The opposite of retention is turnover. Though it could be inevitable for some employees to leave the workplace, a high turnover can signal points of improvement.
Why Is Employee Retention Important?
Now that we know what is employee retention, it’s crucial to understand why you need to focus on it to grow the business. Here are some benefits of employee retention to a company:
Improved Team Morale
Imagine yourself working for a company where people come and go on the regular. Chances are, you probably won’t have the motivation to work there for a long time.
For one, you probably would start seeing the company as a “stepping stone” rather than a company you’d want to stay in and grow with. In addition to that, seeing your colleagues move on to other opportunities may also make you feel that it’s time to seize the next phase of your career path.
It can be hard to maintain a sustained workflow if employee turnover is high. It’s a lot more challenging to carry on a project when the team has different members every few months. Poor retention can constantly keep your team in square one. As a result, it could take longer to get to the next step because the new team members would need to get acquainted with the tasks.
Less Training Time
Training new hires and introducing them to business operations can take time. In addition to the time spent on training, you also need to give time allowance and let new employees adjust to the company culture.
Better employee retention means less training time for employees. Instead of continually teaching new hires the basics, you can use the time and resources to provide further training for long-term employees.
Besides training, experience is also a crucial part of how productive your employees could be. When employees stay with the venture for a long time, they get exposed to various types of cases and situations that enrich their knowledge and problem-solving skills. This leads to improved productivity and better business performance.
Employees who stay in a company for a long time see the business as a venture they can grow with. The company becomes more than merely a source of bread and butter, but an entity they’re proudly a part of. As a result, they will invest their time, effort, energy, and, most of all, loyalty to strengthen the organization.
How To Manage Employee Retention
Knowing what employee retention is isn’t enough. A company needs to establish and maintain an employee retention program to ensure that it’s done right. Here are a few employee retention strategies to help improve employee retention and reduce turnover.
Excellent Compensation and Benefits
People work to earn a living. That said, most people will always choose to work for a company that provides superb compensation and an excellent benefits package.
If you don’t compensate your employees enough for what they do, they’re most likely to look for another job opportunity that would offer them what they’re looking for. Give your employees the compensation that they deserve, and you’ll get a better chance of having them stay long-term.
Pleasant Working Environment
Though material compensation is crucial, it’s not the end-all, be-all of an ideal workplace. Building a pleasant working environment is also an essential factor in employee retention. Foster a spirit of community, diversity, camaraderie, and teamwork in the company. Create a workplace environment that employees would be excited to go to every morning.
Career development is one of the most critical parts of how to improve employee retention and motivation. Offer regular training and education to help employees become better at what they do. By investing in their training, you’re not only helping improve your business operations, but you’re also gearing people for self-improvement.
In addition to offering training and courses, you must also take note of possible promotions and recognitions. This would make employees feel valued in their workplace.
Most companies have a top-down communication approach. This means that information is passed on from the top management down to the managers and then to employees. That said, you should make an effort to empower employees to communicate with you. Be it grievances or suggestions, there must be open communication within the team to help the business thrive and constantly improve.
Besides that, it’s also crucial to make sure that your employees are well-informed about crucial info, such as pay-raise schemes or performance evaluation results. Doing so will inform them of their status and make them strive to be better.
Knowing Why Employees Want to Leave
One way to reduce employee turnover is to know why they want to leave in the first place. Every time an employee resigns, make sure to get their insight about the company and how to improve it. Doing so will help you see blind spots and develop solutions to make the company better and stronger.
In the end, it’s all about making the company a superb place to work. To do this, you must consider what the employees can do for your business and what the business can do to enrich your employees’ careers.