EMPLOYEE RETENTION IDEAS 2014

REASONS EMPLOYEES LEAVE• Based on SPHR, 88% of employees leave for reasons other than pay• 70% of managers think employees leave because of pay-related

reasons

The most common reasons employees leave are:

1. Feel the job/workplace is not what they expected2. Mismatch between job and person3. Too little coaching and feedback4. Too few growth and advancement opportunities5. Feel devalued and unrecognized6. Feel stress from overwork and have a work/life imbalance7. Lose trust and confidence in senior leaders

TURNOVER FACTS AND FIGURES #1Turnover is costly. According to Right Management:

-It costs nearly three times an employee’s salary to replace someone which includes:• Recruitment• Lost Productivity• Lost Opportunities

Facts and Rates according to Work Solutions:• Over 50% of people recruited into an organization leave within 2 years• One in four new hires leave within 6 months• Nearly 70% of organizations report that staff turnover has a negative

financial impact due to the cost of recruiting, hiring, and training a replacement employee and the overtime work of current employees that’s required until the organization can fill the vacant position

• Nearly 70% of organizations report difficulties in replacing staff• 50% of organizations experience regular problems with employee retention

TURNOVER FACTS AND FIGURES #2Studies on the cost of employee turnover are all over the board. Some studies (such as SHMR) predict that every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average.

What is the real cost of losing an employee?

According to Josh Bersin (Bersin by Deloitte) the “real” cost of calculating the loss of an employee are:

-The cost of hiring a new employee including advertising, interviewing, screening, and hiring-Cost of on-boarding a new person including training and management time-Lost productivity… new employees can take up to 1-2 years to match the productivity of an existing person-Lost engagement… other employees who see high turnover tend to disengage and lose productivity-Customer service and errors, for example new employees take longer and are often less adept at solving

problems-Training cost. For example, over 2-3 years a business likely invests 10-20% of an employee’s salary or more in training-Cultural impact… whenever someone leaves others ask “why?”

TURNOVER FACTS AND FIGURES #3

The real cost of employee turnover is unknown because companies don’t accurately track exit costs, recruiting, interviewing, hiring, orientation and training, lost productivity, potential customer dissatisfaction, reduced or lost business, administrative costs, lost expertise, etc. This takes collaboration among departments (HR, Finance, Operations) to measure these costs and reporting mechanisms.

Retention Tips:• Benchmark employee retention rate• Use proven retention strategies, not guesswork• Don’t assume employees are happy (create a high-feedback environment)• Provide different benefits for different employees (focusing on the high-value, expensive to replace

employees)• Conduct exit interviews

RETENTION METHODSEmployees are looking for a career package, including a comfortable company culture, career path, diversity of responsibilities, and a work/life balance.

Effective methods to ensure employees stay at an organization:1. Training:

-Reinforces employee’s sense of value

-Employers help employees achieve goals and ensure a solid understanding of job requirements.

2. Mentoring:

-Integrated with a goal-oriented feedback system provides a structured mechanism for developing strong relationships and a solid foundation for employee retention and growth

3. Instill a positive culture:

-Establish values as the basis for culture such as honesty, excellence, attitude, respect, and teamwork

4. Use communication to build credibility:

-Communication is central to building and maintaining credibility

-It’s important employees know the employer is listening and responds (or acknowledges) employee input

RETENTION METHODS5. Encourage referrals and recruit from within:

-Minimizes confusion of job expectations

-Current employees can realistically describe a position and environment to the individual he/she is referring

-Hiring from within lessens the impact of turnover, since current employees have already discovered they are a good fit in the organization

6. Coaching/Feedback:

-Ensures employees’ efforts stay aligned with the company’s goals and meet expectations

-Intensive feedback should be provided for the first four to six months on the job

-Provide formal and informal feedback throughout the year

7. Provide growth opportunities:

-Workshops, software, or other tools help employees increase their understanding of themselves and what they want from their careers and enhance their goal-setting efforts.

-Job challenges expand employees’ knowledge in their field

-According to Right Management, employees are more likely to stay engaged in their jobs and committed to an organization that makes investments in them and their career development

RETENTION METHODS8. Make employees feel valued:

-Employees will go the extra mile if:

-They feel responsible for the results of their work

-Have a sense of worth in their jobs

-Believe their jobs make good use of their skills

-Receive recognition for their contributions

9. Lower stress from overworking and create work/life balance:

-Offer nontraditional work schedules (compressed work week, telecommuting, and flextime) or extra holidays

-Employer will experience more productivity in the workplace because employees will be less stressed, healthier, and thus, more productive

CONCLUSION

Employees need:

-To feel valued and appreciated

-Given feedback

-Provided with growth opportunities

-Given work-life balance options

-Have trust and confidence in their leaders

All of these retention strategies are beneficial when an employer wants to keep employees within an organization and keep costs of turnover low