Creating a company culture that results in retention of great employees
Employee retention is one of the greatest challenges employers face. Studies show that the hard costs of replacing a salaried employee average 21.4% of that salary, and that doesn’t include the soft costs: temporary loss of productivity as existing employees adjust to a higher workload to cover reduced staff, lowered morale, lost efficiency as the new hire gets up to speed, and the slowdown of whole team as they help explain, correct, and train the new member. Unfortunately, that’s the cost of doing business, and it’s not getting any better. Employees are now only staying on the job for an average of 1.5 years.
But it is particularly challenging when a key employee, a great one, leaves a company. The departure of a valued employee can not only impact their team or department, but may negatively impact supervisors and managers as well, who may be left wondering if they are to blame. After all, we’ve all heard the phrase “People don’t leave a job, they leave a manager.”
The truth is, if your business is losing highly skilled, highly valued employees faster than anticipated, it is time to do some self-evaluation and look closely at your corporate culture. In order to avoid the high costs of turnover, take a look at the following areas:
- Do all your employees understand your mission and vision? Not just the financials, since, unless your employees have stock options, those goals aren’t significant to them. Employees want to participate in a mission and work toward goals that are meaningful to them, not just generate profits for management
Diversity and inclusion
- Do you fairly and equally hire, compensate, and promote all employees regardless of race, gender, age, or orientation? No one wants to work in an unfair workplace. Make sure that your hiring and retention practices are fair, and that nobody has to work harder to earn the same rewards. Include your vendors and suppliers in your diversity plans as well.
- Your strongest employees want to be challenged, included, and given opportunities for growth. Do you know what their goals and aspirations are? Have you helped them see a future and progression within your company, or do they feel like their best chance of advancement is elsewhere? Are you rewarding good work with increasing autonomy, or the opportunity to work on new or special projects? Nobody wants to work at a dead-end job, and nobody wants to be micro-managed. Show your employees respect, give them new challenges, and help them envision a future worth working for.
- Even your best employees will have a difficult time staying positive if their team suffers from low morale. If the team is unhappy or not working hard, your best people may feel like they are pulling too much of the weight. And productive, unified teams help drive employee engagement and reduce turnover. Help not just your people, but your teams and departments do their best work and stay motivated.
These cultural factors heavily influence an employee’s happiness on the job, and can be addressed by thoughtful, attentive, transparent changes in how your company interacts, communicates, and cultivates talent.
When you are trying to reduce turnover and hold on to key employees, don’t rely on exit interviews to give an accurate assessment. By the time an employee is on their way out, they have disengaged. They want to move on with little fuss and a good reference, so an exit interview isn’t the best measure of your performance as a manager.
Instead, connect with your employees while they are still working for you. Make sure they know you support their goals and aspirations, that you recognize and reward strong performance, and that you are actively seeking their input and listening to their concerns. Employees who feel recognized and valued, who are listened to, and who have a role in shaping their own future and the future of the company, are engaged, committed, and likely to stay.