How long do employees stay at your company?
You already know the importance of employee retention. Training costs are diluted over time. More importantly, experienced employees do a better job all around. Losing your employees too early is simply bad for business. The thing is, what does too early mean? How do you know if your retention rate is high or low?
A 2016 Compensation Force study showed that the average turnover rate among all industries is 17.8% If your retention rate is lower than 82.2% you might be in trouble. Keep in mind that’s a general average, you should take the time to look up your specific industry average.
What does it mean to be below the average?
Long story short, you’ll have a hard time competing in the market. If your retention rate is lower than your competition’s they already have an edge. Their employees will perform better and their products or services will cost less. You might still keep business going. But, you’ll definitively see fewer profits at the end of each month.
Factors that affect employee retention
The main factor we should take a look at is employee satisfaction. It might be surprising but a good salary plays a lesser role than you think. Sure, it’s still really important. However, it’s usually not enough. You need to make sure your team understands how important they are to the company. If they feel appreciated and know they’re making a difference they will stay with you longer.
Another critical factor is social interactions. How is the general mood at your office? Sure, it’s a place of business, not a bar. Still, do your employees feel respected by their peers? Is there a healthy competition among them? That can make a huge difference towards employee satisfaction and therefore for employee retention.
After you make sure everything is ok with those two you should consider opportunities for advancement. Your team will work better and harder if they have a clear path towards a better life.
How to improve employee retention?
You don’t need to start giving huge raises. People are complex and a balanced approach towards employee satisfaction is always better. Think about how to address these factors.
Host a corporate award ceremony
The best way to show employees your appreciation is with a party. Everybody will have a good time and that will be associated with your business. Another plus of the award ceremony is that it will also improve the social component. Receiving an award in front of your peer is a good way to earn respect. The more importance you give to this award, the stronger that respect will become.
Start a corporate sports team
Fun is always a great way to bring people together. Your employees will be more comfortable with each other if they share some fun. Plus, they will learn to work better as a team.
Promote from the inside
Offering opportunities for advancement is quite straight forward. Try to promote employees rather than hiring middle and senior jobs from outside. There are other ways to present your employees with opportunities. You can try covering relevant courses for them. that way they’ll be both happier and more valuable to the company.
There are many different approaches you can take to improve your employee motivation. Keep in mind how important it is and don’t let it slip. Without a good team, your business will have no hands.