One of the biggest misconceptions when it comes to effective employee retention policy is that a bigger paycheck is the right solution but nothing could be further from the truth. A shared commitment to mutual growth is the right solution.
Most companies face the conundrum of rising attrition as there is a shortage of talent in today’s hyper-competitive marketplace. The international economy has also recovered which combined with market stability may mean an employee turnover rate of 15 to 20% in the coming year.
If higher compensation and a variety of benefit packages tailored to match the skill set of employees fail at stemming attrition, it is time to revisit the employee retention strategy.
The focus on employee retention should begin with the first introduction of the employee right at the recruitment stage. The company should also look at the organization fit in addition to attitude and skill match while interviewing a candidate for a position. An employee is less likely to leave if his or her personality, attitude, working style, and mindset matches the company values and culture.
Communication Is the Key
Inculcating company loyalty in the employees is important but simply telling them about performance metrics and their role is not sufficient. It is important to formulate a communication process where employees understand their value to the company and the mission and vision of the business for the next year/years and how they can play a part in this goal. It may be in the form of face-to-face meetings, internal survey or a monthly town hall but it is important to leverage these forums to communicate the how and why you should be their employer of choice.
Coaching Instead of Managing
The senior leadership’s management style may also be responsible for high attrition rate as it has been observed that employees often leave managers and not the company. There are a number of ways to boost employee morale including giving them the freedom to explore various solutions, providing insightful recognition and feedback, setting effective go goals, shaping the professional growth of employees and being aligned with the team’s frustrations and passions among others. It is imperative for HR and managers to move towards creating the careers of their employees instead of managing them.
Flexibility in Working Schedule
Good employees are always looking for professional opportunities where they can maintain a good work-life balance. Therefore, it is important for companies to introduce flexible working opportunities where employees do not need to compromise on their critical personal commitments to finish the work on time. It can be in a number of forms such as an extended paternity leave, effective scheduling of workload, work from home policy and other such things to keep employees productive and happy.
One of the major reasons for employees leaving an organization is that they are unable to find a clear path to professional development and growth. Some of the ways in which employees can be motivated include giving them cross-training on skills related to their interest but interlinked with the objectives of the business, arranging for various mentorship programs for boosting internal promotion and providing them financial assistance for their higher education.
Performance Evaluation and Feedback
Performance evaluation works great but only if there are achievable and clear objectives for measuring the performance of individuals, teams, and company. It is imperative to regularly inform employees about the things where they are doing well and where they need to step up a bit along with how their capabilities and talent are contributing to the business. When employees realize how their work helps in achieving the company goals, it boosts their desire to help their company and gives them a sense of responsibility.
Move beyond Salary/Bonus and Equity
It is true that bonus/equity and salary are the most important things that attract employees to an organization but these perks are often not enough to keep them there. While financial rewards are great but innovative ways should be sought to recognize an employee for outstanding achievements and make them proud of their accomplishments.
It can be done in a variety of ways including displaying the employee’s name on the wall of fame, inviting the whole family to a private dinner with the CEO, publishing their achievement in the monthly employee newsletter, and other such things that will make them feel secure, successful and valued.
Identify the Reasons That Make Employees Stay
One of the best ways to find out why employees leave a company is exit interviews. On the other hand, one of the ways to identify the things that you do well and things you don’t is to conduct stay interviews with long tenured employees who have chosen to stay in the company. You may ask them why they joined the company and why they have stayed. Also, you may ask them the things that would make them leave and what they would like to change or improve in the company. The answers to these questions can provide insights into the motivations of the employees.
It is important to keep in mind that each employee is different. Businesses cannot retain all the top employees by following a one size fits all strategy. The senior leaders and HR department should follow a collective approach for cultivating company culture that rewards talent, encourages sharing knowledge, fosters mutual commitment towards building a successful company and offers a way for employees to maintain a healthy work-life balance.