Employee turnover is part of business. In fact, one study showed that 91% of millennials expect to change jobs every two years. That’s an incredible 15-20 jobs over the course of a lifetime.
Whilst it’s healthy to bring new talent into your business, losing your best employees is something every small business owner or manager dreads.
That’s why it’s wise to have a retention strategy in place to keep your best employees where you want them... on your payroll.
Why is strong employee retention good for productivity?
Losing your best employees isn’t just about losing the input of those individuals. Keeping employees on-board is good news for overall business productivity. Here’s why:
- It’s more cost-effective. Hiring and onboarding costs time and money. According to research, the average employee costs £12,000 to replace. And that money could be better invested in programmes, software, even a marketing campaign – all of which can drive your productivity.
- A stable team is a productive team. Research shows that people follow a similar pattern when forming a new “team”: forming, storming, norming, performing. No matter how good the people in your team are, replacing a team member means it takes time for them to reach the “performing” stage, and whilst that’s the case, you cannot expect peak productivity.
- Established employees are more productive. It can take up to two years for an employee to reach peak productivity. On this basis, if an employee hands in their notice within two years of their start date, it’s reasonable to assume that they didn’t reach their potential with you.
How can I stop my best employees from leaving?
Look at your numbers
First off, it always pays to look into the numbers by keeping an eye on your staff turnover ratio. Is there a pattern?
Your business might be small enough for you to see if some teams or departments are losing employees more than others. If your SME is larger, cut the data by team and by time period to see if there’s an underlying trend.
Understand why people leave
Numbers alone won’t help you. You need to know why your employees are leaving.
Conducting exit interviews might seem like too much when you’re already swamped with recruiting for the next role. But think twice: these interviews provide valuable insights into why – and where - employees are packing up their desks.
Studies repeatedly show that employees are more likely to stay if they find meaning in their work.
Regularly review workloads and ensure your people are engaged in their roles. Employee engagement surveys can be useful here, too.
Help them develop
Give your employees the chance of a career, not a job. Developing your employees means better retention.
And with smaller budgets for salary rises this is good news for SMEs. According to a study by LinkedIn, 50% of people joining small organisations want challenge, impact, vision, and culture - not necessarily pay.
So, what can you do? Ask your employees what they want out of their careers and discuss how you might be able to help them.
By showing them you’re interested in their development you have a better chance of keeping them in your business.
Establish a strong culture
A positive and healthy workplace culture is one of your best allies when it comes to keeping star talent on your side. A strong company culture will boost collaboration, productivity and retention. It’s also a useful tool when recruiting new employees, making recruitment easier when you’re looking for new talent.
Interested in taking steps to strengthen your culture? Find out about our Culture Pledge.
Recognize & reward
Under-appreciated employees don’t stick around for long.
Incorporating a meaningful and consistent approach to reward and recognition contributes towards a positive culture and better retention.
Reward and recognition don’t need to be all about cash gifts and extravagant gestures. There are simple, cost-effective ways to build recognition and reward into your organisation which work just as effectively.
Take our Kudos tool, for example - we use this at Breathe HQ to determine our employee of the month (it works a treat).
Taking time to provide feedback to employees will motivate them to do a better job and help steer them onto the right track.
If you’re serious about improving retention, introducing flexible working will yield strong results.
In fact, a study by the TUC found that 28% of employees would look for a new job if it gave them more convenient hours.
Stuck for ideas? Open it up to your staff and agree ways of working more flexibly. There are lots of solutions available, such as working from home, flexi-time and job sharing.
And, as studies show that flexible working-employees are more productive, becoming more flexible should definitely be on your to-do list.
Managing flexible working doesn’t need to be difficult; cloud-based HR software such as Breathe is accessible no matter where or when your team is working.
Be diverse and inclusive
Many businesses are making a concerted effort to improve their workforce diversity. And that’s great for business.
In fact, a McKinsey study found that organisations who are more gender-balanced and racially diverse see better overall performance.
But too many businesses forget about inclusivity and that spells disaster for employee retention. Inclusivity is about backing up your diversity promises; in simple terms that’s about making your workplace welcoming to broader audience – a far cry from the “bro culture” you might see in some SMEs.
After all, why would a new employee stay in an organisation where they felt excluded?
Inclusivity can be challenging for even the most well-meaning of us (as this TED talk shows).
Make use of online resources to help strengthen your business’s inclusivity performance and everyone in your business will benefit.