Although employee retention is on every HR professional’s mind, they each deal with it differently. Employee retention can be the only thing you think about (when things are going poorly) or the furthest thought from your mind (when things are going well). If left unaddressed, however, workplace dissatisfaction can lead to employee turnover. Regardless of your management approach, it is important to understand that most employees leave their jobs because they feel unvalued and underappreciated. And based on years of experience developing high-impact employee rewards programs, we’ve learned the best ways to help employees feel valued enough to stick around and excel. The first well-kept secret we can tell you is that unlike monetary perks (which are typically forgotten as soon as an employee uses their extra earnings to buy their next pair of shoes), non-monetary incentives improve employee retention in the long run.
In 2016, the national average employee retention rate was 81%, as measured by SHRM. From our perspective, that number is a lot lower than most employers aim for. Of course, retention rates vary by industry—for instance, they’re extremely high for government positions and extremely low for fast food, supermarket, and staffing companies. But for most firms in the professional services, we consider a retention rate of 90% to be in the healthy range.
If you already have a high retention rate, congratulations! You’re probably already aware of how that metric impacts your company’s bottom line each year—but you may not realize what else that says about your company. We’ll get into the specifics below and offer a few tried-and-true suggestions to help raise your retention rates even higher.
What a High Retention Rate Says About Your Company
Retention rates serve as a valuable vital sign for your company. If you’ve got a healthy retention rate (or you’re actively working toward improvements in that direction), you’ll be pleased to know your efforts reflect well on your company as a whole. To potential hires, new investors, and even customers, a healthy retention rate says a lot about how your company operates. For instance:
You pay your employees well.
Compensation (including salaries, bonuses, and allowances) is the first thing disgruntled employees tend to complain about on Glassdoor reviews. If you have a high retention rate, it means you’re probably offering monetary compensation that’s right on target with the competitive market. Keep this up by monitoring comparable positions and salaries every six months. Remember, however, that money is not always the driving force in motivating employees to stay.
Your managerial strategy is successful.
A high retention rate means that team members in your company get along well with their managers. Employees who dislike their boss are often the first to leave, but your employees feel supported, encouraged, and challenged by leadership. This means they’re motivated to stick around and fulfill long-term goals with your company—and it looks really promising to new hires who may be fleeing poor management elsewhere.
You offer a comprehensive benefits package.
Monetary benefits, alternative compensation, and fringe benefits are all incredibly important to employees. Offering a comprehensive package can help make your company irresistible to prospective employees, especially when it includes incentives and merit-based rewards to keep them motivated and engaged day-to-day. If you put enough time and thought into devising the best benefits your employees actually want, your benefits budget will be money well-spent. Keep up the investment!
You have a great system for training your employees.
Employee satisfaction depends heavily on the amount and quality of training employees receive. Your company’s healthy retention rate shows you’re doing a great job of preparing team members for their roles and empowering them to ask questions and solve problems as they arise. Your employees feel prepared and able to do their jobs, which makes coming to work each day a lot easier.
You provide pathways for career advancement.
Finally, a high retention rate means your company does a great job of thinking about the future. You’re actively providing challenges for your team members that help them grow and develop both professionally and personally. Your employees see themselves pursuing a long and happy career with your firm, and they’re actively guided up the career ladder by a supportive management structure. This is the final step in retaining your best employees—which makes it the most crucial.
How to Raise Your Employee Retention Rate
If you’re currently looking to raise your retention rate, you might see the items above as a road map toward success—but you’ll notice quickly that accomplishing each of these momentous benchmarks takes a huge amount of time, effort, and budget restructuring. Not everyone can afford to rehire all new leadership staff, double salaries, add comprehensive dental and vision insurance, and invest in employee development all in one year (or even five).
Instead, try some first steps that you can accomplish this month:
- Distribute a survey. If you want to know how your employees feel about their job, go straight to the source and ask them. The employee net promoter score (eNPS) is one example of a survey that can help you judge (in a hard numbers kind of way) how satisfied your employees are with your company. Distribute your first survey now and repeat twice per year to keep tabs on your progress.
- Perform a job market analysis. Take some time this month to evaluate the job market in your industry and local area. Your goal: determining the range of monetary and non-monetary benefits for each role in your company. Also, pay close attention to what benefits your competitors are offering.
- Start management style discussions. If you’ve never taken the time to discuss leadership styles with your employees, today is the day to begin. Schedule team building activities that facilitate an open discussion about challenges, triumphs, and growth points relating to leadership and the company as a whole.
- Launch an employee recognition program. One of the easiest ways to improve your employee satisfaction metrics is to start recognizing and rewarding your employees for their hard work. No matter what their specific industry may be, all employees want to be appreciated for their hard work and desire to understand (and be a part of) the bigger picture. A custom employee rewards program not only incentivizes employees to perform better but also rewards them for their genuine efforts. In the long run, employee rewards and incentives offer the best means of retaining your best employees.
If you’re interested in taking steps toward a healthy retention rate (and all the positive outcomes that come with it), it’s time to get started. Small, manageable steps will help your company gradually retain more employees and will evolve in a measured and thoughtful way.
For your first step, try implementing an employee recognition and rewards program. Inproma crafts custom systems that really work to improve employee satisfaction, motivation, and retention—and we’ve earned an impressive ROI for each of our corporate clients.