Employee Retention: A Complete guide to keeping your best employees
If you have hired top performers as a small business owner, then you would understand why they say employees are assets to any company.
As a small business owner, your top performers will become a vital part of your business. How well do you think your business will thrive if your top performers leave?
Not very well, I guess.
To avoid unplanned business downtimes, you have to retain employees that give their all for the growth of the business.
How can you even do this?
We know that it is incredibly difficult to retain good employees as top performers have many choices and options.
Here is a guide on how to retain your best employees. In this guide, you would get to know:
- The meaning of employee retention
- The objective of employee retention
- Why employees leave
- Why you should retain your best employees
- Ways to Improve your employee retention
- How to measure your employee retention rate
What is Employee Retention?
Employee retention is defined as an organization’s ability to retain its employees. Employee retention is also a process in which the employees of a company are motivated and encouraged to stay in an organization for a long period of time for the sustainability of the organization.
The ultimate aim of employee retention is to make both the employer and the employee happier. Employee retention facilitates loyal employees sticking to the company for a long time.
The Objective of Employee Retention
The objective of employee retention is to attract, hire, and retain the right employees. Many businesses do well when it comes to attracting and hiring talents, but retaining them can be very difficult.
If you fail in employee retention practices, then maybe you don’t have an idea of the cost of turn over. You require expensive processes to train and onboard new employees, especially when you are hiring often.
Putting an employee retention plan in place can help you reduce the rate of employee turn over since its objective is to ensure that your best employees are effectively managed to give their best.
Why Employees Leave
Have you ever wondered why your top performers leave?
It could be frustrating when you put in your best as an employer to hiring the best candidate, and finally, you notice that the employee wants to leave.
According to research, employees leave an organization for different reasons ranging from lack of motivation to lack of growth prospects.
Employees may decide to leave a company for different reasons. This is why it is important for human resources managers and line managers to pay attention to factors that may result in an employee leaving.
Your best employees may leave for the following reasons:
- When the job ends up not being what they expected it to be.
An employee already has an idea of what he/she will expect from the job even before they resume. If an employee resumes and discovers that what he/she expected is far different from what they are seeing, they will likely leave.
For example; A candidate applies for the role of a marketing manager, on resuming at the office the employee finds out that he is not going to manage anybody or anything. The employee will have to go on the field and search for customers.
From the example above, do you think this kind of employee will not leave for a better place?
- When there is a job responsibility mismatch
Job candidates apply to positions that most interest them, and jobs that they are capable of doing. No employee will be satisfied with a job when he/she is given a responsibility that is different from what was agreed upon employment.
It is good you know that every employee wants to build their experience in any job role or field of their choice. So when there is a responsibility mismatch, an employee will find it difficult to build on their experience. This can make an employee decide to leave.
- Lack of growth opportunities
Everyone wants to grow, and so do your employees. Employees work in order to move themselves up in their career ladder or build themselves up to an extent that they can start up their own business.
Regardless of an employee’s reason for growth, you should know that when an employee does not see your company as a place that will help them achieve whatever kind of growth they want to achieve, they will begin to look elsewhere.
- Lack of appreciation
Your best employees put in a lot to become what they are. From staying committed to the job, working extra hours, to even brainstorming on ideas that will move your company to the next level.
Lack of appreciation from the management can make this kind of employee feel less valued. The employee may feel like the company is taking advantage of their excellence and unwilling to pay back the good gestures.
Appreciating your best employees will go a long to ensure that they are retained.
- Lack of trust and support from co-workers and supervisors
Every new employee would love to feel accepted and welcomed to the company. When an employee constantly does not get the support and encouragement that they need to perform well, over time the employee will become fed up.
For example, if employee A is a top performer that does not engage in office gossip, always delivers given the task at the right time, etc. but his supervisor picks on him and criticizes almost everything that he does.
If this continues for a long time, employee A will get tired of his supervisor and get frustrated with the job.
A frustrated employee is an employee that is at the verge of leaving the company as soon as they can.
- Stress from work and work-life imbalance
Stress is something that can make a top employee leave your company. Not everyone is great at managing stress and still be productive at the same time.
Regardless of how excellent an employee might be, an employee can leave a job if the stress of the job is interfering with their health or other areas of their lives.
See how you can reduce the work stress from your employees. You can infuse breaks in between work hours, encourage team bonding activities.
- Poor compensation
As an employer, you should know that an employee does not come to work everyday from 9-5 because they don’t have anything to do.
Every employee wants to be fairly compensated for the work that they do. Delaying an employee’s salary or not paying at all are the factors that can lead to an employer leaving your company.
- New job offer
Everyone wants a good life. Your best employee will likely leave the job if he/she finds a job with better prospects. Your company may not be the best place to work, but putting in plans to accommodate the needs of your employees will go a long way to ensure that your employees are retained.
- Lack of job stability and security
Every employee wants to know if they would grow and succeed if they commit themselves to work in your organization.
Your company’s purpose, brand reputation, market positioning, etc. can influence an employee’s decision on whether or not they should remain with your company. It is good you communicate your brand’s vision and long term goals with your employees.
Female top performers can leave your company for reasons other than the ones that we have mentioned. They can leave for reasons like:
When it comes to female staff, pregnancy is a defining factor for them when it comes to whether or not they will leave their jobs.
If your top performers are females, then you should look forward to putting maternity benefits in place to cater for their maternal needs.
If your company does not make provision for maternity leave or flexible working hours for female staff, then you may be on your way to letting go of your best employees.
Your female staff can decide to get married and start a family at any time. So, you have to put down plans that would accommodate this change in the life of your female staff.
You can introduce the option of remote working for female staff that are looking forward to relocating due to marriage.
Why You Should Retain Your Best Employees
Many employers have the mindset that they can always hire someone to get the job done, so there is no need for them to retain employees.
This is not always the case. We know that there are prospective hires everywhere, but how many will eventually become your best employees.
Employees that would give their all to ensure that your company achieves its goals may not be easy to come by. That is why it is necessary for you to ensure you retain great employees when you eventually find them.
If you feel that retaining your best employees are unnecessary, then let us take a look at why retaining a top employee is necessary for your business:
- Reduces hiring time and resources
The hiring is a process that requires resources and time. The job of shortlisting individuals from a pool of talents, conducting interviews and eventually onboarding an employee is a serious and expensive job.
Recruiting the right candidate can be time-consuming. Retaining your best employees will save you the time and resources that it would take you to recruit new employees on a regular basis.
- It will help you maintain productivity
When your best employees are retained it will help your business maintain the stability with the amount of work that the employees are putting into the business.
Your best employees would have gotten used to the job over time, and this gives the business some form of balance. Not retaining your employees and hiring new employees everytime may affect the stability of your company’s productivity.
- It is cost-effective
Retaining your best employees will definitely save you cost. The cost of retaining your top employee is cheaper than the cost of recruiting new hires.
- It will help your company’s branding
Retaining your best employees will give both your employees and outsiders the impression that your company is a good place to work.
When employees leave your company regularly, it shows that your company is not one that takes employee retention seriously.
- Retaining your best employees will reduce the risk of losing them to competitors
Retaining your best employees will save you the risk of losing them to your competitors. If your competitors get a hold of your best hands, it may make the competition even more fierce.
- You will have loyal employees
According to research, employees that stay long in a company have a greater tendency to become loyal employees.
Every employer would love to work with loyal employees. Retaining your best employees will help you get loyal employees.
How To Retain Your Best Employees
Retaining your best employees is a vital aspect of your business growth and success. Your company may face some challenges if you don’t retain your best employees.
Hiring employees is the first stage of building a strong workforce for your business. Retaining the employees that you have hired is the next stage to building a stronger workforce.
These steps will help you retain your best employees:
- Live up to your employee’s expectations
Every employee has an expectation in mind even before they decided to take up the job offer. An employee may build their expectation from the information that you gave in the job description.
Make sure your employees understand what the job requires of them. This may seem simple, but this can cause some form of misunderstanding between you and your employee.
If an employee is not fully aware of the responsibilities their job calls for, and what the company needs from them, it will be impossible for them to perform up to the standard, which can lead to lack of motivation.
- Reward employees
Rewarding top-performing employees can go a long way to helping you retain your best employees. You can encourage healthy competition amongst your employees, and reward exceptional staff.
Rewarding your employees for punctuality, over time, etc. will motivate them to do more and even stay in the company.
- Offer financial reward
Offer financial rewards to employees that meet up to a particular target or performance goals. Providing yearly financial appraisal on their salary will help your employees feel appreciated and motivated to work.
- Ensure a growth path
Employees would love to work in a place that will propel their growth. It is necessary for you to build a structure for your business that would give an employee a clear path of enhancement.
Employees may become frustrated if they don’t see any clear growth path for themselves in the company. It is necessary that you promote your employees when necessary.
Ensure that your employees are trained from time to time to encourage their career growth and development.
- Offer competitive benefit
Offer a competitive benefit to employees that matches what they do. Employees always want to be fairly compensated for the job that they do.
Offering competitive benefits packages like; providing health insurance, life insurance, retirement savings plan, etc. can help you retain your best employees.
- Ensure effective communication
Communicating effectively with your employees will help you retain your best employees. Create open communication between the management and the employees. Hold regular meetings where employees can share their ideas and ask questions.
Avoid communication gap. Create an open-door policy that encourages employees to speak frankly without the fear of intimidation.
- Hire a professional HR Manager
Hire a competent Hr professional that will help you oversee your employee structure and processes.
Hiring an HR Manager will make sure the task of managing employee benefits, perks, reviews, etc. is taking off your shoulder.
- Ensure good work-life balance
Ensuring a good work-life balance will help you retain your best employees. Infusing fun activities into the work hours, offering flexible work hours, and remote working will help you retain your best employees.
- Foster teamwork
Getting your employees to work together will help your employees achieve more. Encourage a culture of collaboration that accommodates individuals’ working style. Build a work environment that will allow individual talents to shine.
Clarifying your team’s objective, goals, etc. can help individuals in the team contribute their ideas and solutions.
How You Can Measure Your Employee Retention Rate
If you have been following the steps above, then it is good for you to measure your employee retention rate to determine whether you are growing or not.
Calculating your employee retention rate will help you determine a baseline, it will also give you a point of reference to determine how your company is doing.
You can calculate your employee retention by:
Looking at the total number of employees that have stayed over a period of time, (say 5 years) divided by the number of employees that have gone within that same time frame, then multiply by 100.
Calculating your employee retention rate can help you know how well you are doing with employee retention from time to time.
It is important for you as a business owner to recognize your best employees and put in plans that would ensure that they remain committed and happy with the job.
Ensuring an effective HR function can help your employees establish a long-term relationship with the company beyond the paycheck.
Ogugua Belonwu is the founder of MyJobMag, a recruitment company in Nigeria. Find him on twitter @ogzille