As competition for finding and keeping great employees gets tighter, employers must evaluate how competitive they are in this area. Once you have developed a phenomenal strategy for attracting excellent employees, how do you keep them from being lured away by a competitor? Below is part one of a two-part series listing ideas and suggestions to help reduce turnover in your company as well as keep your current employees happy.
Keys to Retaining Employees and Reducing Turnover
- Pay Increases
Clearly, this is not always an option. As the old saying goes, “throwing money at the problem is not really a solution”. However, it is crucial for employers to keep a close watch on current salary trends in their industry and in areas of certain expertise. For instance, if unemployment is at an all-time low and salaries at a high, you have no choice but to do whatever you can to stay competitive. Employees will not stay solely based on money, but the odds of leaving increase if there is a guarantee for a much higher salary elsewhere. One common mistake that companies make when hiring is to base the salary on their budget, rather than market realities. A general school of thought in this area is to find out the going rate for a position and at least match it if at all possible.
- Offer an Employee Benefits Program
Medical, dental, and life insurance coverage are typically at the top of an employee’s wish list, and one incentive that most large companies will provide. If you are limited in budget, you can look into the Chamber of Commerce, or your local HR Representative can look into inexpensive solutions such as discount plans.
- Create an Employee Incentive Program
The best person to ask for assistance in this area is a local Senior Human Resources person. They are on the forefront with what employees are looking for and what has worked for companies in the past. Bonus plans, management incentives and commissions area all ideas, although there are an unlimited amount of options. Management experts say that if budgets are low, any incentive plan is better than none at all, even if it is a gift certificate or an extra day off.
- Evaluate Your Management Team
This may seem like it is not pertinent to this topic, however, a recent nationwide study showed that the number one reason employees change jobs is for money. The second reason? You guessed it: people are unhappy with management. If you have had tremendous turnover in a certain role or department, it is time to evaluate if there is more to the story. Focusing on exit interviews is always a good practice, and you may discover weaknesses in management or company structure that are an easy fix. Employees will often feel that they do not have a way out from a difficult management situation or an unpleasant boss, and they tend to feel the only option is to go another place of employment and start over. Human Resources can be great to assist in this area, but the most important step is to gather information and address any management situation that might be occurring, before it becomes a repeated pattern.
- Extra Perks
This can mean a lot of things. It could be a gourmet coffee machine, a recreation room with ping pong or pool, or even a fully equipped gym for larger companies. You could even reimburse for local gyms or spa memberships. A full cafeteria with gourmet meals may not be in your budget, but what about weekly lunches delivered, or pizza Fridays? Employees do notice these things.
Obviously, having some of these perks won’t be the deciding factor in a candidate deciding to take or stay at a job. However, I vividly remember visiting a client years ago and meeting in a huge kitchen, with flat screens everywhere, two fully stocked refrigerators, a gourmet coffee bar and a counter full of snacks. My thought was, wow, I could see myself enjoying this. If the company puts that much thought and energy in taking care of its employees, then maybe they take care of them in a lot of other ways.
Flexible work arrangements are one of the most popular employee incentives today. There are excellent articles and research around these areas. Contrary to the negative press around the recent Yahoo telecommuting decision, there are numerous companies that swear by it and there are multiple studies to show that it is a great option. Employee benefits of telecommuting include reducing time and commute, gas and meal expenses and a reduced stress level. There are also minimal distractions and employees can log on and work immediately if needed. Employee benefits include lower attrition rates due to satisfied workers, lower absenteeism and lower overhead costs. The largest benefit is increased productivity both in quality and quantity. A recent Stanford University study showed that teleworkers outperformed in office workers by 15% both in quality and quantity.
Forbes Magazine has an April 2013 article titled “Flexible Workspaces: Employee Perk or Business Tool to Recruit Top Talent?” (http://www.forbes.com). This article states that 30 million Americans now work from home at least one day a week, and that number is forecasted to sharply increase over the coming years. It is estimated that by 2020, one in three people will be hired to work online, from anywhere they want. As a recruiter, I am asked weekly about telecommuting or have candidates tell me that in lieu of a raise they were allowed to telecommute and they stayed with their company because of that. There is excellent research to provide recommendations for when telecommuting is appropriate and to provide guidance on developing a plan.
- Recognize Good Performance
Small things, like Employee of the Month or All Star Employee Awards, are a nice pat on the back. While not expected, they are appreciated. Not every employee needs the bronze head statue in the corporate lobby as provided by a well-known pharma company, but a mention in the company newsletter or special parking spot for a month could be worth some extra effort.
- Alternative Work Schedules
Throughout the past decade, alternative work schedules have risen in popularity. Examples such as Flextime, Compressed Work Schedules and Reduced Hours Schedule are all gaining ground. Larger companies have also provided options like job sharing and transitioning from part-time to full-time following extended leave. All of these schedules have pros and cons and it is important to weigh the benefits/risks for your company.
Visit our blog next week where we will share additional tips for retaining employees and reducing turnover.