Employee retention is an often-undervalued metric in the business world. Many businesses rate their success based on profitability, consumer preference, and market share. Yet, success should also be understood through employee retention and satisfaction.
There are multiple factors that influence employee retention and turnover. In this article, we’ll explain why employee retention is so important and how to improve your company’s employee retention rate to ensure long term satisfaction.
What Is Employee Retention?
First things first, let’s answer the question: What is employee retention? One simple definition of employee retention is: the goal of keeping employees and reducing turnover.
According to this definition, businesses should be committed to increasing or maintaining their employee retention rate. They can do this by incorporating strategies that contribute to job satisfaction and employee morale.
Employee Retention Rate
Building on the employee retention definition, the employee retention rate can be calculated based on employee turnover and longevity, as there is an inverse relationship between employee turnover and the employee retention rate. Therefore, the higher a company’s employee retention rate, the lower the employee turnover or the fewer employees leave the company over a period of time.
Conversely, the lower the employee retention rate, the higher the employee turnover is. This means that it is more common for employees to leave the company over time. For example, if in a given year, you start with 10 employees, and at the end of the year, 9 of these 10 employees are still working for your company, your employee retention rate is 90%.
Employee Retention Strategy
To maintain or increase the employee retention rate, there are several employee retention strategies to consider. Employee retention strategies focus on building trust and morale. This can happen through positive feedback and support with career growth (i.e., formal advanced schooling, internal advancement opportunities). In addition, employee retention rates improve when employees feel seen, heard, and valued. Building a culture of respect and accountability is a must to retain the best employees.
Another employee retention strategy is the creation of an explicit employee retention program. The employee retention program serves the purpose of not only tracking the employee retention rate, but ensuring that employees are satisfied in their work. These programs can create a space for employees to air grievances and share their ideas. Employee retention programs are a surefire way to keep employee retention rates on an upward trajectory.
Why Is It Important?
It is easy to see the value of having employees available to do work that needs to get done. Though, it can be more difficult to understand why employee retention is so important. If you don’t have difficulty finding new employees, why worry about retaining them?
There are many benefits of employee retention. Yes, maintaining a high employee retention rate means that a company has the manpower needed to fulfill the work that has to be done. But, keeping a full staff also ensures that management is not wasting resources on hiring and training new employees. Many managers underestimate how long it takes to train a new employee on a company’s processes, tools, and culture. An increased employee retention rate can also be correlated with employee satisfaction. If a team is together for years, they can create shared experiences and a positive dynamic.
Time have changed as well. The rise of popular platforms such as LinkedIn and Glassdoor means that former and current employees can openly discuss a company’s corporate culture. By ensuring that current employees are satisfied, a company can curtail some of the negative reviews that can come with a low employee retention rate.
In this sense, focusing on employee retention provides a material benefit. They show that potential employees can trust that the culture of a company offers enough growth and satisfaction that employees are willing to stay. This makes it much easier to attract the best applicants.
How To Improve Employee Retention
Now that you know more about employee retention rates, you are likely wondering how to improve employee retention at your company. One of the key ways is by training managers for employee retention. Poor management is one of the top reasons that employees leave a company. Companies must ensure that they not only train managers in employee retention strategies, but that these strategies are being implemented.
Employee Retention Ideas
In addition, there are many employee retention ideas that can increase workplace satisfaction. Some companies offer benefits to employees that stay at a company for a longer period of time. These benefits could include special bonuses, increased pay, and ongoing incentives for continued employment. Another employee retention idea is incorporating educational opportunities for employees. This can include on-the-job training or access to financial support for formal education such as professional certifications or advanced academic degrees.
Employee Retention Training
Companies that want to focus on ensuring that management is contributing to employment retention can do so through employee retention training. Training primarily focuses on engaging with the management team through workshops or courses on leadership development, communication skills, and employee tracking.
In addition, employee retention training can take the form of establishing an onboarding process which introduces new employees and managers to the company support team, values, and policies. Ensuring new employees feel welcomed and included is an important initial step to improving employee retention.
Regardless of the size or type of company, employee retention is important, not only to reduce turnover, but to attract top talent. For companies that need to increase employee retention, there are simple but effective employee retention strategies to help ensure employees feel seen and heard within the company. We trust this article helped spur some ideas for your employee retention plan! If you’re looking for more training opportunities, take a look at our corporate training offerings here.
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