Employee retention is the act of keeping employees. Webster's Dictionary defines retaining as keeping in one's pay or service. Unless it needs to lay off employees, the organization wants to keep its employees in its pay and service. There are many reasons that organizations want to retain employees, and there are actions the organization can take to promote employee retention.
Employee Retention Definition
Employees have diverse needs. Employee retention involves a systematic effort by the organization to create an environment that addresses diverse employee needs so employees will stay with the company, according to Workforce Planning for Wisconsin State Government.
Why Employee Retention?
The replacement cost for an employee averages 2-1/2 times the salary of the individual, Workforce Planning for Wisconsin State Government reports. This includes hiring costs, such as interviewing, screening and verifying credentials. Then, you must train the new employee.
After you hire and train the new employee, you are only right back where you started. Not only are there hiring and training costs, there is productivity loss, potential costumer loss and damaged morale.
Wisconsin State Government Employee Retention Strategies
According to Workforce Planning for Wisconsin State Government, the strategies for employee retention are courtship, coaching, communication, compensation, collaboration, commitment and continuous improvement. Courtship involves creating a good relationship with your employees from the beginning. Continue to coach your employees; act as a mentor and a leader. This promotes loyalty.
Effective communication is vital in any organization; open communication creates a friendly environment and makes your employees feel that they belong. Compensation comes in many forms; come up with creative ways to compensate your employees.
Collaboration involves working together and sharing experiences; this creates a team setting for your employees. Do not take your employees for granted; show them your commitment through appreciation, feedback and recognition. Show your employees that your organization is making an effort to continuously improve. Update your organization's knowledge and abilities.
The "Wall Street Journal" on How to Retain Employees
Offer your employees good benefits. If you show your employees that you care if they have health insurance, dental insurance and a little time off, they are more inclined to stay with your organization. Provide a few little perks. These perks can be as small as donuts on Monday morning. Your employees will appreciate the gesture.
Contests and incentives, if done right, keep employees motivated. You can also conduct "stay interviews." Similar to exit interviews, stay interviews ask questions pertaining to the employees' satisfaction in their work environment. In addition, promote from within if possible and promote employee development though training programs and tuition reimbursement.
Offer financial rewards, such as profit sharing and raises. Also, if you have more than 100 employees, hire human resources personnel to oversee employee satisfaction. Get your managers involved and be sure your employees always know what you expect of them. This way, everyone is on the same page.