Why Employee Retention and Hiring Plans Matter Now More Than Ever, Part II
Turnover is costly, from lost productivity to recruitment and onboarding. Research shows the cost to replace senior leaders is 1.5 to 2 times their annual salary, and the cost for employees and team members is approximately 70% of their salary. Combine this with changing labor-force economics, employee retention has become a challenge leaders need to pay attention to in 2016.
Let’s talk about what you can do to improve retention starting today, from identifying what really matters most to employees to knowing where to focus your efforts for the greatest impact.
First, an employee retention plan is really an employee engagement plan
Employee engagement is the key to retention. At WorkplaceDynamics, we view it as the intersection of three factors: Motivation, Loyalty, and Referral. In other words, you want employees to give their very best, commit to your organization, and recommend it to others. Employees measure the value of what they get in exchange for what they give. From a value perspective, they are thinking on two levels: What’s in it for me and What are we doing together?
Pay and benefits are part of that, and so are training, career development, and personal growth. These things certainly help your retention strategy. But there is much more to why people choose to stay.
Millions of employees have told us what matters most to them
WorkplaceDynamics has surveyed more than 33,000 companies and 11 million employees since 2006, and we will survey another two million from 7,000 organizations this year. So what matters most to them? The same qualities that differentiate Top Workplaces from the rest: a belief in the organization, where it is headed, and how it will get there.
Employees want to believe they’re part of something bigger. It all starts with senior leadership, and here are the questions they should be considering:
- Do we have alignment? Employees need to rally behind your organization’s shared purpose, direction, and the values you are championing.
- Is there a sense of accomplishment? Employees need a sense of progress against direction and purpose.
- Are employees connected? Employees want to know they are appreciated by the organization.
- Do your managers get it? They need to understand their role in retention.
What does employee engagement sound like?
When we ask people why they love their jobs, here are the types of comments we hear:
- “I am appreciated for what I do. I’m not made to feel as though I’m lucky to have a job. Instead, my company makes sure I know they feel lucky to have me.”
- “I love working for my company! My manager listens and takes immediate action. Let’s just say, they’ll have to drag me outta here kicking and screaming!”
- “For the first time, I feel like I belong. I’m appreciated and respected in my position. I give 125% and I look forward to seeing what’s new every day!”
OK, your organization needs an employee retention plan. Where should you begin?
Perhaps your organization doesn’t have a retention plan—or perhaps it does, but you know it could use improvement. Here are my recommendations:
- Make employee retention a priority and ensure the entire senior leadership team is on board.
- Determine where your organization stands with employees—and why they choose to stay. Create a safe environment for employees to provide honest feedback.
- Use a reliable, third-party employee engagement survey to give employees a voice. And then listen to them. Really listen.
- Identify what’s going well and encourage those things. Uncover where there’s room for improvement and go after it.
- Turn those insights into action. If you aren’t sure what the survey data says, enlist the help of an expert who can guide and support the process as well as present high-leverage recommendations to senior leadership.
- Review and repeat. Employee engagement is a journey, not a destination.
Our research shows Top Workplaces do these things, they do them regularly, and the results show. On average, they achieve a 67% employee engagement rate. Compare the stats—Gallup recently reported engagement levels for U.S. employees are a meager 32%.
One last note: Leaders often think of retention in terms of keeping the best performers or employees with high potential. While it’s fine to have individual plans for them, you’ll get far more leverage by engaging your entire workforce rather than a select few. One of the biggest mistakes you can make is to target top talent at the expense of everyone else, which creates disengagement and a revolving door.