Employee retention is one of the key concerns for HR in every company. While some percentage of attrition is unavoidable and even healthy, nobody wants to lose high performers. After all it can cost upto 200% of annual salary to replace a high skilled employee.
Average attrition rates differ from industry to industry. Government organizations typically have low attrition rate whereas industries like staffing and hospitality can have attrition as high as 300%. Attrition also changes along the hierarchy. Positions at lower end typically have higher attrition than mid and top-level management positions.
Here are some ideas to consider if you want to keep attrition at your company under control.
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Frequent Appraisals
According to Glassdoor, 35% of employees surveyed said they would look for a job if they did not receive a raise within the next year.
We all know that the months post appraisal, are when employees are most likely to leave. If they think that appraisals do not match their expectation they had, they will start looking for jobs in the market. For this reason it is important that managers and HR manage expectations throughout the year and not just during appraisal month.
Hold regular performance discussions so that there are no unwanted surprises at the end of appraisal cycle. Quantify as many KRA as possible. Employees are less likely to be disappointed when their numbers have been discussed with them regularly.
If your company policy permits, its also a good idea to have appraisals semi-annually or quarterly. This keeps employees motivated and they are less likely to leave.
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Team Building Activities
People are less likely to leave if they are having fun at work and feel attached to their co-workers. Everyone loves to work with in a close knit team and would not want to give up friendships they have built in office.
Outbound trips, employee engagement activities and corporate events are good ways to forge friendships at workplace. Games, dance events and competitions infuse fun in your culture and improve employee engagement.
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Stock Options
This is a good way to retain employees if your company is in start-up or growth phase. ESOP or employee stock options give employees a sense of ownership and belongingness. They are the engines driving your growth so it is also a just compensation for small and mid-size businesses that cannot afford big paychecks.
Stock option of company with growth potential will retain employees. They are more likely to stick around till the company has made it big and their stock is worth a significant amount.
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Work Environment
Company culture is another factor that affects retention. Although most people think of Google offices when it comes to good culture not every company can allow pets and bean bags at office.
The idea here is not to copy the cultures of other companies but to have a strong culture of your own. By strong we mean that the environment is positive and your core values are clearly reflected in everything that you do.
Some values that contribute to positivity at workplace are transparency, safety of workers, credibility and integrity. There is no ‘culture formula’ that fits all companies but one should avoid culture that lead to office politics, inefficiency, jealousy, harassment.
A toxic environment is the quickest way to send away your best employees.
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Referral System
Referral system is a great way to encourage employee bonding and maintain your company culture. Because your employees know the culture of the company they are likely to invite only those friends who fit within your organizational culture. What’s more is, the person hired is more likely to stay because he is now working with his friend.
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Job Role Change
Another reason why people quit their job is monotony. Doing the same job for years together, can get boring and uninspiring. People tend to think of career or role change in such a scenario.
What if you could give them this opportunity within the organization? Start an internal job postings portal for employees looking for a change. Not only will you stop employee attrition but you will also fill another position without having to spend on recruitment, training and orientation.
Some companies also have a policy of job rotation every few years. This keeps the work fresh for employees and brings in new ideas into each department.
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Learning & Development
According to Udemy, 46% of employees said that learning & development is the most important benefit when deciding where to work. People want to get better and learn more skills in order to advance their career. In-fact self-actualization is the highest of needs in Maslow’s pyramid of human needs. So once you have taken care of financial and belonging needs of your workforce this is the next obvious step.
Employees are more likely to stick around if your company takes care of learning and development by regularly investing in people. This lets the employees know that you care for them and are committed to keeping skilled people in the organization.
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Managerial Training
Nearly half of employees said they’ve quit a job because of a bad manager, 56% think managers are promoted prematurely and 60% think managers need managerial training (Udemy).
Managers are the face of the company for your employees. They are the ones who interact with them day to day and have to get the work done. Incompetent managers increase stress for everyone and struggle at motivating their team.
Incompatibility with managers is one of the common reasons for employees to leave their job. Every team member requires a different kind of approach by managers and you must invest in training your manager if exiting employees are citing their reporting manager as a reason for resignation.
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Flexible Work Options
Expectations about work-life balance are changing as younger generation enters the workforce. 86% of employees between the ages 18-34 said they’d sooner sign a contract with remote work options.
There are plenty of freelancing opportunities and digital business options now available. People do not see the need to go to an office for a strict 9 to 5 job. Incidentally, this is profitable even for companies as it cuts office premise cost and conveyance time.
You must work on flexible work options if you are to remain competitive in market today. Work from home, flexible working hours and remote working are soon going to be a norm in many industries.
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Feedback Loops
Nobody wants to leave their well paying job if there was a way to work around problems of a job. Many companies don’t have any feedback mechanism and loose employees because they have no way to resolve their issue.
By collecting regular feedback on employee engagement you can avoid the employee drain that is coming in the future. Give you employees a change to voice their concerns so that they do not have to take the extreme step of quitting their job.
Establishment of employee redressal cell, anonymous feedback, harassment cells helps to solve problems early and retain your best performers
Conclusion
Employee retention is getting increasingly difficult in today’s competitive market. Employee retention and engagement is an important department within HR for this very reason. Based on your industry, size of company and workplace culture, you may pick up the most suitable ideas from the mentioned.