15 employee retention strategies that every company must follow
There is a direct correlation between being a great company to work for and employee retention. We take a look at what few companies are doing right in this area to become the most preferred company to work for.
If you have been googling employee retention strategies, chances are you are already nursing a wound from talent loss. While some amount of attrition is good as it allows new talent to enter and accept challenges, too much of it is a red signal.
You are not alone!
According to Forbes, surveys indicate that 54 percent of Indian workers are seriously considering leaving their jobs, with 66 percent of them in the 16-24 years age bracket.
This of course does not bode well for the startup generation of companies that are focused on hiring younger talent that will need to stick around for the company to grow. High attrition is not investor friendly.
Before we get into strategies of employee retention, let’s see why it is so important.
Employee retention saves money… straight and simple. Keeping your talent pool leak proof ensures that you save precious training hours and monies, not to mention avoid the concomitant loss of business contacts.
Ketan Kapoor, CEO and Co-founder, Mettl, cites a study by Mercer Inc in his article on high attrition that showed that 45 percent of employers reported turnover costs of $10,000 per lost employee, while 20 percent reported costs closer to $30,000.
Higher attrition also affects the overall morale of the employee, and leads to loss in productivity and in the long run profits. So, employee retention strategies are your safety net against the influences of bad attrition. As we mentioned before, some attrition is bound to happen, but making sure it is within a healthy bracket is what you need to focus on.
Is there a thing like a healthy attrition rate?
According to smallbusinesses.com, a healthy employee turnover rate is one that allows your business to run efficiently and gives you more opportunities.
If the bottom 10 percent of your workforce typically underperform, then 10 percent may be an ideal turnover rate for your company. If your turnover rate correlates with the percentage of your staff whose work doesn't meet your expectations, then 10 percent is a healthy turnover – one that gives you room to keep improving your crew.
Employee retention strategies work
There is a direct correlation between being a great company to work for and employee retention. We take a look at few companies that are doing well in this area, and we were not surprised.
Google was also named the best company to work for by Fortune magazine for the sixth year in a row. Glassdoor named it best to work within 2019. Their attrition rates are a healthy 10 percent according to some inside sources, which given the massive size of its human capital, is commendable.
We looked at what companies like them and Facebook (another one that spoils their employees to bits) are doing, and came up with a bunch of fun and straight forward strategies to keep your team from running out of that door. These are guaranteed to work, so get reading!
Get the right fit
Your hiring squad has to get it right. One of the big reasons an employee might want to leave is the fact that he/she doesn’t fit the role.
Hasty hiring often results in wrong judgement, and what follows is repeated trainings, appraisal trauma, and overall employee – manager frustration. Set good guidelines and spend a little more time on understanding the individual’s fit with the company and company goals.
Google gets two million applications for 5,000 vacancies every year. It also has an exhaustive recruitment process that ensures they get it right.
Retaining the employee is easier when they want what the company can offer them.
Uncle Scrooge, no please
Compensation is the biggest reason why employees jump the company boat. At the end of the day, employees are the scaffolding of your business. If you don’t share your growth with your employees, they are bound to seek out greener pastures.
Google makes it a point to recruit only the finest talent and compensates them accordingly. Their higher positions are often head hunted, with professional doings tracked for months before being hired. So their compensation mirrors their worth to the company.
Increase the smile quotient
Do not underestimate the power of a human smile. A team that laughs together, stays together. Encourage open mic for the friendly in-house funny guys. If not organise regular (and compulsory) bouts of watching great stand up together at least once a week – Netflix is good too!
These 30 to 40 minutes once a week could very well be the secret employee retention glue that holds it all together!
Up, up and not away
Top leadership positions are becoming younger and ambition is becoming higher. The startup culture engages with this mindset. Giving employees a clear look at where they can expect to see themselves could become an integral part of the appraisal process. It gives the employee a goal to work towards, and the company a committed workforce.
At Google, each employee is assigned a mentor who helps them chart their growth in the company. This approach works well as it helps the employee stay focused on where he/she sees themselves X years into their relationship with the company.
Food glorious food
Ensuring your employees are productive can start at the food they eat. Employees spend over 50 percent of their waking hours at work, and ensuring their body is well fueled is one way to make them feel loved.
Having a nutritionist take a few sessions would help make sure they are eating right. Maybe have fit buddies for those trying to get fit and lose weight. Having a healthy (pun intended) relationship at the workplace is a good way to increase your employee retention rate in the long run.
Kick ass working environment
One needs imagination, and not money to create a great working environment that engages and therefore retains employees. Psychologists have long pointed out the effect of good environment on overall efficiency. Employees spend a greater part of their day at their work spaces, therefore, a conducive and healthy work environment leads to a healthy work force.
Google’s work environment seems to be an employee retention technique in itself. Fluid workspaces and a fun and quirky work environment have made this company’s employees loathe to leave it. From energy boosting sports facilities to creativity inducing gaming tournaments, all of these go into creating an environment that is part of a robust employee retention plan.
Everyone craves recognition for their efforts. Employees who are given credit for their work are more likely to stick around as they feel valued. It’s one of the most basic ways to an employee’s heart. Make an awards night out of it. Have creative awards and some song and dance. Bring an energetic buzz to the prospect of doing things well.
For those who can, go all out, have an annual gala event that everyone can work towards. Knowing that their good work will be appreciated is a great way to foster innovation as well. This is because those who think out of the box are the pillars of your company’s success. If worked on, this could be an employee retention programme that the world talks about!
Give them a skill pill
Employees appreciate the opportunity to retool and re-skill themselves. Often, the advantage provided by a good skill course gives their productivity a shot in the arm. Employee exchange programmes have also shown great results in helping personnel understand the various aspects of company work culture, and promotes a healthy learning environment.
Google gives its employees “20 percent time”. This is a concept where employees can work on personal projects once a week. While it may seem like a lot, some of Google’s great offerings have come from employees who have worked on those projects during their 20 percent.
When you include the family, you make a connection that is deeper. Especially in a country like India, where family ties are very important, making a connect with the family is like a trump card. Here again, it’s the thought that counts. A well-organised bring your kid to work day, or a bring your family kind of picnic will help build a relationship that is so much more than transactional.
This is an employee retention technique that everyone should adopt… because if they ever think of leaving, their spouse/ parent/ kid will say, “But don’t you remember when…” and make them stay.
The extent of employee benefits appears to be directly proportional to the commitment the employer feels towards creating an environment that is conducive to retaining good employees. It is a myth that great employee benefits serve no purpose to the company productivity.
Google has some of the most well thought out employee benefits like thoughtful parenting support benefits. Then again, even when they were a money strapped start up, they would let their employees bring their pets to work. The bottom line is, giving employees benefits is not a function of money, but thoughtfulness.
Less time on the road
With the world going digital, giving employees the freedom to take up work at home or giving them flexi timings means they spend less time on the road and more time being productive… and happy!
An employee spends a whopping 10 percent of their daily productive hours on the road! That is more than a pity… it is a crime! Setting great protocols that encourage deliverables rather than time card punching means you get more work and less complaints about traffic.
This perk will surely increase your employee retention rates, as everyone wants to live life to the full rather than creep by on the roads.
Keep that door open
“Open door policy” is an oft used term, but hardly ever properly practiced. It refers to the openness of top leadership towards a free communication channel with all the levels within the company. If implemented well, it works to eliminate the ill-effects of misguided expectations and disagreements on good talent by keeping channels of communication open.
Google implements a weekly session that allows for employees to ask relevant questions to senior management. This is a practice since their inception, and continues to show results even today and they credit this practice for a lot of their success with talent retention.
Trust the team
Cultivating team spirit is not just a great employee retention strategy, but also a productivity booster. Regular team building workshops, effective off-site and incentivised team travel, and the opportunity to develop inter-team relationships creates a social fabric within the company that is hard to quit.
A good team creates great products. All the companies that have found great success have one thing in common, brilliant team work.
Google considers team building and communication one of the back bones of its success, as great ideas are born when teams brainstorm together.
Mean bosses make losses
As the saying goes, people don’t quit their jobs, they quit their bosses. A manager who lacks leadership skills is a danger to any employee retention strategy. Building strong leaders within the company is very important. They are the ones whose actions can deliver a single-handed victory or defeat to the objectives of the employee retention plan in your company. Good talent should not suffer bad managers.
On the other hand, a manager who nurtures talent, values productivity over personal opinions, and ensures his/ her team is happy and doing their best work is gold. Such a leader can take your existing employee retention strategies and 10x it.
So investing in good leadership programmes and making sure that your company’s higher rungs of management have what it takes to be great mentors rather than just bosses will drastically affect your employee retention rates positively.
Google’s “career guru” programme allows junior staff members to receive guidance on work and navigating the corridors of office politics in a friendly environment.
Love thy employee
Most companies consider the traditional bottom line as the best way to maximise growth. But businesses are built by people. A strong workforce that is in sync with company values and goals is what ensures success. In the long run, the employee-first mindset will attract the best talent, build a committed workforce, and achieve mind blowing results.
Google is an example of this. Having started in the simplest of ways, Google adopted this approach to create a hugely successful company that fosters the best minds to create the best output. Their success with talent retention is a testimony to the power of putting employees first.
These are some strategies that can help you create a great employee retention plan. Every single one is a strategy in itself. If your company uses these to create a wholesome employee retention programme, you could well be on your way to becoming a coveted place for the best talent around. Investing in human capital equals investing in the long term success of your company. So start by putting employees first.
(Edited by Megha Reddy)