Retention: The Better Buzzword
Earlier in the week, we discussed some hard, cold truths about turnover, and its toxic effects on any given workforce (both to your bottom line, and to your company culture).
As promised, I am following up with a list of retention tools to help combat the perils of high turnover.
Read on for five ideas to promote workforce retentionŠtips that purposefully do not include suggestions that revolve around ³increasing compensation². It is my belief that employee retention goes beyond looking at the almighty dollar, and that there are more engaging ways to keep employees loyal to your organization.
Five Tips for Retaining your Workforce:
1) Say ‘Thank You’ in other words, cultivate an environment of appreciation. This is something immediately within your control; easy to do; and brings about significant returns. A simple, appreciative email or quick ‘thanks for what you do’ goes a long way. This one should be a no-brainer, because if you’ve said these words to your workforce, you’ve inevitably been met with a positive reaction. That said, if you need more concrete proof, countless studies have proven that showing appreciation speaks volumes (a quick “Google” search on the topic will arm you with enough reading material to keep you at the computer for weeks)
2) Instill a sense of purpose make it a point to communicate better with your employees communicating more transparently and fluidly can lead to increased engagement and loyalty. Share as much as you’re able around the plan or key initiatives for the quarter; be candid and truthful about the state of the business; reiterate how your employees fit into the picture of success. This instills purpose. Or, as a quick example, spend five minutes referencing your organization’s Mission Statement during your next team meeting. Revisit those words with your staff in a non-cheesy way. What does the mission mean to them? How do they fit into the picture? Let a discussion happen. Bottom line? When employees feel included, they feel valued.
3) Consider implementing a Tuition Assistance/Reimbursement Policy (and no, I’m not just including this tip because I worked at a University). Seriously; consider this: just making $2,500 per year available to employees to put toward tuition costs might actually save you money in the not-so-long run. Remember when we discussed cost in our “Turnover Truths” in the last post? As a refresher, the gist is that studies have shown it costs a minimum of $6,000 $10,000 to replace one employee bringing home $30K – $50K / year. Add in the fact that voluntary turnover continues to rise (rates climbed even more in the last months of 2014, according to the Bureau of Labor Statistics), and we’ve got a perfect storm of factors leading to lots of money spent on recruitment and hiring.
What does all of this have to do with tuition assistance? Well, allocating funds toward fueling education is a strong tool in the fight to retain employees. It’s an attractive benefit that might just entice that large pool of those voluntarily-jumping-ship-for-new-opportunities employees to stay with your organization for a long time (or at least a couple of years). Moreover, by supporting education, you’re building up your workforce talent pipeline with educated employees that very well may be positioned for promotion within.
Still not on board with this train of thought? Let’s dig a little deeper, and look at an example comparing the average turnover rate and cost compared to tuition assistance dollars.
In this example, we¹’e going to utilize the current average turnover rate of the retail industry. And, although the retail industry example may be dramatic, considering the fact that basically one out of every two employees leave upon being hired, but it’s important to remember that rates hovering around 50% are fairly commonplace in many lower-wage industries (call centers, part-time positions, etc.). So, essentially, these numbers are important to consider.
Example Turnover Rate / Replacement Cost vs. Tuition Assistance:
|Starting Workforce||Average Turnover Rate||Cost to Replace One Employee||Cost to Replenish Workforce to Starting Capacity||Tuition Assistance Provided||Total Savings|
|10 employees||50%||$6,000 $10,000*||$30,000 $50,000||$2,500 / year ($25,000 for 10 employees)**||$5,000 – $25,000|
*Employee making $30K – $50K annually
** Assuming a 100% participation rate in a tuition assistance program (which is a highly optimistic assumption of participation)
Numbers don’t lie; you really could be saving money while giving money to employees for education. In this case, if only one employee ended up being retained as a result of utilizing the benefit of tuition assistance, you’re still saving $3,500 $7,500 in replacement costs. Even if you doubled the tuition assistance dollars per employee over the course of the year, you would still ultimately end up saving money in the end and perhaps providing even more incentive for an employee to stay.
So, while we’re on the topic of “staying”, there’s a good chance you just may get workers to stick around longer if you don’t require them to remain employed with the company after their education is completed. Retention clauses tend to discourage participation, as employees are afraid to commit to a company for years after they’ve finished classes. Think about it: employees can’t necessarily predict what their situation is going to look like in three to six years. In fact, neither can most employers.
Sometimes, a shift in the way of thinking (and tuition reimbursement policy writing) is the catalyst for change. In this case, the decision to omit any sort of retention policy might just mean you end up increasing retention rates and maximizing the benefits of the program to your organization. Plus, your employees feel that important sense of being valued, and knowing that their employer cares about their professional development.
Or, to put it more simply and anecdotally, you catch more flies with honey than with vinegar, right?
4) Recognition efforts harkening back to the idea of showing appreciation, think about starting some sort of recognition program within your organization (or, revising an outdated program that generates little more participation than rolled eyes). Peer-to-peer platforms can be especially effective in encouraging a sense of community, cross-department interaction, and a positive work environment
5) Leadership training what better idea to retain employees than to foster an environment of succession planning and development? Especially if your idea of talent management is to ‘promote from within’. Incorporating internal training whether it be specific to leadership or other relevant topics shows an investment in your employees (whether they actually take advantage of the professional development opportunities or not, honestly).
These five tips are just a start to your employee retention journey, but they’ve hopefully gotten your mind working, and have sparked some ideas for promoting an environment of appreciation and retention.
What tips for retaining employees do you have to share? In the spirit of collaboration, please share your best practices in the comments below!
To your organization’s success!