Matt Tenney, Contributor
The high rates of turnover we saw with The Great Resignation, during which a large swath of the American workforce left their jobs, prompted many organizations to revisit their retention practices.
As employees’ needs are shifting, they are shifting their expectations and looking for other opportunities that are a better fit in their particular version of the “new normal.”
Organizations who want to recruit and hang onto top talent are reevaluating compensation and benefits packages to determine if there are ways they could better meet employee needs.
While compensation is still a top concern for many workers, there are less tangible perks that help employees meet their need for a healthy work-life balance, flexibility, and more purposeful work.
When employees’ needs are met, they are less likely to leave. This makes an organization’s employee retention practices a key factor for sustainable employment.
Employee retention practices improve the chances employees will stay because they improve employee engagement. Establishing an organizational culture that guides workers and gives their work meaning, providing development opportunities, and fostering autonomy are just a few practices that can boost retention.
In this article, we’ll explore employee retention practices that meet employee needs and improve retention.
Employee Retention Explained
Retention refers to a company’s ability to retain employees. High rates of retention are the result of reducing employee turnover, which refers to the number of employees who leave a job during a certain time period, either voluntarily or involuntarily.
High retention rates can indicate a high level of engagement, superior performance, and better customer service within an organization.
Employee retention significantly impacts the performance, profitability, and long-term success of organizations because high rates of retention mean lower rates of turnover—which is important because the cost of turnover can have a devastating effect on a company’s bottom line.
It is more efficient to retain qualified employees than to train and onboard new hires. It has been reported that turnover costs companies, on average, six to nine months of an employee’s salary to replace that employee.
Turnover was the top workforce management challenge cited by 47% of human resource professionals in the SHRM/Globoforce survey Using Recognition and Other Workplace Efforts to Engage Employees.
Improving Employee Engagement Improves Retention
In order to improve retention, organizations need to improve employee engagement. They do this by positively shaping employee experience, starting at recruitment.
According to Gallup, “Employees who are engaged are more likely to stay with their organization, reducing overall turnover and the costs associated with it. They feel a stronger bond to their organization’s mission and purpose, making them more effective brand ambassadors. They build stronger relationships with customers, helping their company increase sales and profitability.”
Engagement is particularly important as employees who care more about an organization’s mission feel a sense of purpose in their roles and will be less likely to leave an organization they feel strongly connected to.
This helps organizations avoid the high costs associated with turnover, which includes the cost of recruiting and onboarding new employees, loss of productivity, and effects of disengagement on performance.
Engaged employees are enthusiastic about their jobs and committed to the success of the organizations they work for. They demonstrate their dedication through behaviors that help organizations perform well, grow sustainably, and improve profits.
Retention practices that are focused on meeting employee needs and helping employees thrive will improve engagement, and higher levels of engagement will improve the organization’s retention rate.
Three Key Employee Engagement Practices
Here are three practices that will boost retention rates in your organization:
Foster An Organizational Culture That Helps Employees Find Meaning
Culture plays a critical role in both attracting and retaining top talent. It’s also crucial to helping employees see deeper meaning in their work.
Workers are paying attention to what organizations stand for these days and are seeking meaningful work with organizations that share their values.
Glassdoor found that 77% of workers consider a company’s culture before applying. Another study showed that 70% of employees say they wouldn’t work for a company that didn’t have a strong purpose.
Even more interesting, 60% would take a cut in pay to work at a purpose-focused company, and 90% of employees who work for companies with a strong sense of purpose say they’re more inspired, motivated, and loyal.
People want to know that they’re working for something more than just a paycheck and want their work to be valuable beyond its monetary value.
When employees feel a sense of purpose in their jobs, and when they can take a wider view of their work and see how it impacts the world, they will be more loyal to the organization and more likely to stay put.
A strong organizational culture will provide the meaning employees seek by connecting the dots between the work they do and its impact on the lives of others.
A recent report found that 89% of employees say they are more likely to be loyal to purpose-driven companies, highlighting the important role meaningful work may play in people’s job-seeking behaviors.
A compelling mission and core values that guide employees in helping to achieve a compelling vision can unite your team with a shared sense of purpose, making workers more engaged with their work and more loyal to the organization.
An organization’s culture should be people-focused, with core values that guide employee behaviors and help them recognize the purpose of their work. These core values should be modeled by leadership.
As Business Leadership Today contributor John Spence says, “Creating an atmosphere of fun, camaraderie, empowerment, pride, purpose, and recognition does not happen by chance. Senior leaders must be a living example of the organization’s values and act according to the sort of culture they want to nurture.”
Give Employees the Tools They Need to Work With Autonomy
In his book Drive, Daniel Pink lists autonomy—the desire to direct our own lives—as one of the three most important motivators, along with mastery and purpose, for employees.
Autonomy has been identified as a major factor in the job-seeking habits of workers, with 42% of millennials indicating they would choose a job that allows them to work independently on projects of their choice.
Offering flexibility (when possible) in work schedules is the first step to equipping employees with the tools they need to work with autonomy.
Remote and hybrid work options have been normalized over the course of the pandemic and continue to be desirable for workers who are seeking a better balance between their professional and personal lives.
Allowing employees to work from home if possible, gives them the flexibility to take better care of their families and personal needs—employees are better able to do this when they aren’t having to spend hours every week making those long commutes to an office to do work they can do just as easily from home.
But autonomy isn’t just about working remotely.
Autonomy is about being trusted to do the work well, independently or as a member of a team, and supporting an environment of accountability where employees can take ownership of their roles and see the way their work impacts the organization as a whole.
It’s also about helping employees get the most out of their work, find their strengths, and improve their weaker areas.
One of the best aspects of autonomy is the trust-building potential it brings to an employee’s experience, even when that experience is happening in a remote setting.
When leaders trust employees enough to give them the tools they need to work with autonomy and trust them to do their work well, it actually motivates them to perform well.
Help Employees Grow
Employees need to feel that they are growing professionally and developing their skills and intellectual capabilities for engagement. This makes development opportunities a crucial part of any retention strategy.
Research compiled by LinkedIn has shown that employees who spend time learning on the job are 47% less likely to be stressed, 39% more likely to feel productive and successful, 23% more able to take on additional responsibilities, and 21% more likely to feel confident and happy.
Creating an atmosphere that champions learning and development helps employees grow and develop new knowledge and skills that will help them engage in their jobs.
Providing online or in-person training, courses that are role-specific, leadership development, as well as career-pathing for employees fulfills their need for growth and demonstrates that the organization is invested in that growth.
And it is great for retention because it demonstrates to employees that they have a future in the organization and that the organization’s leadership is invested in their future.
Matt Tenney is an active CEO who aspires to create the best workplace culture in the world. Matt is also the author of Serve To Be Great: Leadership Lessons from a Prison, a Monastery, and a Boardroom, and The Mindfulness Edge: How to Rewire Your Brain for Leadership and Personal Excellence. Matt is frequently invited to present keynote speeches at leadership conferences and meetings. His TEDx Talk has been viewed over 1,000,000 times since January, 2020.