Employee retention refers to the ability of an organization to retain its employees. A distinction should be drawn between low-performing employees and top performers, and efforts to retain employees should be targeted at valuable, contributing employees. Employee turnover is a symptom of deeper issues that have not been resolved, which may include low employee morale, the absence of a clear career path, lack of recognition, poor employee-manager relationships or many other issues. A lack of satisfaction and commitment to the organization can also cause an employee to withdraw and begin looking for other opportunities. Pay does not always play as large a role in inducing turnover as is typically believed
Employee retention matters. Failing to retain a key employee is costly to the bottom line, in addition to organizational issues such as training time and investment, lost knowledge, insecure coworkers and a costly candidate search aside.
Ways to Keep Your Best Employees
1. Promote appropriately.
When your best people are doing the kind of work that makes a difference, recognize it. One great way is to give them a well-deserved promotion. This tells the rest of the company (and others outside) that you appreciate the extra effort they put forth to make the company more profitable and efficient.
2. Pay above-standard rates.
To hire and keep the best, you need to pay them the best. We aren’t talking about a ridiculously high salary for these people, but pay that’s at or below the market rate for the position tells employees that their work is not truly valued. What’s more, they may walk. Change their pay to anywhere from 20 percent to 40 percent over market rate.
3. Get employees’ input — then apply it.
Who knows what it takes to do a job right? The people who are doing it best. If you want to keep people, then involve them in the decision-making process. Create a “safe zone” where you ask them the hard questions about what should be changed . . . then hear them out. You may not be able to implement every suggestion, but change where you can and let them know you value their input.
4. Encourage creative innovation.
The previous point was about changing the present; this one is about changing the future. Give your best people the time and resources to test out fresh new ideas. This will keep them engaged and may just bring in another revenue stream. Many people love to create. Let them do so; it benefits everyone involved.
5. Clean out the dead weight.
This may be the most difficult move. There are likely people in your organization that hold others back. Through their lack of a good work ethic, negativity, sub-par production, gossip and engagement in office politics, they are a cancer to your team. Great people need to work with other great people. Do the hard work of removing those who slow everyone else down.
6. Use friendly competition.
People in competition with one another tend to increase their production. Put together teams in your organization working on solving similar problems or projects with a simultaneous timeline. Offer a small reward (perhaps a dinner out for the winners) to the team that does the highest quality work in the shortest time. Competition is fun, exciting and very engaging. Engaged people stick around.
7. Get off their backs.
Great employees know what they are supposed to be doing and when it needs to be done. Constant reminders and micromanaging will drive them right out the door. Give them the task or project, and be available to answer questions, but otherwise leave them alone. They do their best work without someone always looking over their shoulder.
8. Create open communication between employees and management.
Hold regular meetings in which employees can offer ideas and ask questions. Have an open-door policy that encourages employees to speak frankly with their managers without fear of repercussion.
9. Gets managers involved.
Require your managers to spend time coaching employees, helping good performers move to new positions and minimizing poor performance.
10. Communicate your business’s mission.
Feeling connected to the organization’s goals is one way to keep employees mentally and emotionally tied to your company.
11. Offer financial rewards.
Consider offering stock options or other financial awards for employees who meet performance goals and stay for a predetermined time period, say, three or five years. Also, provide meaningful annual raises. Nothing dashes employee enthusiasm more than a paltry raise. If you can afford it, give more to your top performers. Or, if you don’t want to be stuck with large permanent increases, create a bonus structure where employees can earn an annual bonus if they meet prespecified performance goals.
12. Hire a human-resources professional.
If your company is nearing 100 employees, consider hiring a human-resources director to oversee and streamline your employee structure and processes. Putting one person in charge of managing employee benefits, perks, reviews and related tasks takes a huge load off of you and makes sure employees are treated fairly. HR managers are also more up to date on employment laws and trends. They can set up various programs and perks you may not have known existed.