Machine learning techniques have been used extensively to predict and monitor customer churn. Now they’re being applied to employee retention, and the timing couldn’t be better. In light of incredibly low unemployment rates and a highly competitive labor market, employers’ number one priority is holding on to their best talent. With machine learning, corporate leaders finally have a concrete way to measure, predict, and evaluate the success of employee retention techniques.
According to a promising case study, 40% of employees in the targeted dataset were “likely to leave” and required some action from management in order to be motivated to stay in their current positions. The algorithm then applied various sample actions– including shifting employee locations, rotating managers, and offering incentives– which effectively cut the number of leaving employees in half.
“These results show that to halve the turnover rate, actions only need to be started for 18% of the total population. In the end, about 25% of the population at risk of departure needs a new manager and 11% require an incentive to stay over the first two years of their role.”
If you take these results to their ultimate logical conclusion, two employee retention techniques– making management alterations and offering powerful incentives– may be the most effective ways for your company to minimize turnover.
Reconsider Your Employee Management Strategy
Most managers identify “at risk” employees through intuition– a word here, a glance there, and a general feeling of whether or not their direct reports feel restless enough to jump ship. Especially in high-stress industries like fast food, machine learning exercises like the one discussed above could take the guesswork out of assessing turnover risk.
Beyond reframing the way your managers assess retention rates, it’s even more important to assess the quality of relationships they build with their direct reports. The phrase “employees don’t leave companies– they leave managers” has been thoroughly meme, but still holds an element of truth. Discerning and self-aware managers will know when relationships with their employees are strained or have been less-than-optimal for an extended period of time. This is a clear concern when it comes to assessing turnover risk.
The case study above suggested implementing a manager rotation policy, which could prevent employees from leaving due to dissatisfaction with management. Ideally, you would shift managers around the 1-1.5 year mark. That way, employees could look forward to the change in management and you could preempt an early company exit.
If rotating managers isn’t a possibility for your company, consider taking a more serious look at manager-employee tension. Monitor tense relationships carefully and frequently and ensure they resolve in some way after no more than two months. If changing managers is all it takes to keep your best employees on board, it’s well worth the effort.
Design Incentives That Reduce Employee Turnover
Getting employees to stay with your company past the two-year mark is admittedly difficult in today’s market. Employers try to achieve this miracle by increasing wages, offering comprehensive benefits, and providing fringe perks, but none of these things seems to make a dent in the annual retention rate. Even traditional rewards like annual travel don’t bring the necessary ROI.
None of these things actually incentivizes anyone. Your employees know that they can get these benefits from any company within reach.
To use incentives as a powerful employee retention technique, try building a comprehensive employee recognition program with high-value rewards that employees actually have to earn. I’m talking about non-traditional ways to motivate; not your standard point-based programs.
Set team and individual goals that are tightly aligned with corporate objectives. Schedule the program in such a way that every employee has the potential to earn a reward every quarter. And offer reward items that come with serious bragging rights.
The incentives that actually pull their weight are customized– both to your company and to your individual teams. You have to figure out a way to motivate different departments in different ways. Administration employees are motivated very differently from customer service reps and fulfillment workers. Design your rewards program with that level of specificity in mind.
In the end, everybody wants to be recognized and appreciated for what they do. A successful employee recognition program achieves that goal, therefore making employees more likely to stay with your company for the long haul.
For some CEOs, the path toward improved employee retention is fairly straightforward: simply combine the most effective employee retention techniques and apply them consistently. Identifying the most effective strategies is the true challenge.
If we follow the example of one particularly compelling case study on machine learning, the process would look like this:
- Find a way to objectively measure the exact risk of employee turnover and the relative success of your retention strategies.
- Make necessary changes in order to prioritize positive employee-employer relationships.
- Design employee rewards that actually incentivize individuals to challenge themselves, work harder, and stay longer.
At the end of the day, these are long-term solutions for a long-term challenge. They just might be the steps your company needs to take in order to improve retention.
At Inproma, we recognize the complex challenge of high turnover costs. We’re dedicated to helping companies address this issue through implementing incentive programs that work. Curious about what a fully-customized rewards program could do for your company? Let’s talk.