Retaining employees is so important for any organisation to grow. Here’s 5 tips on how to improve your employee retention rate
Put simply, employee turnover is defined as the rate at which employees leave a company and are replaced by new employees. The term is used broadly to cover both voluntary and involuntary leavers, including those who resign, retire or are made redundant, and it is expressed as a percentage of total workforce numbers.
Retention relates to the ability of an employer to retain their employees, in an attempt to reduce staff turnover. This means that an organisation has to make their company so attractive that employees won’t be tempted to leave for a better offer.
It can be expressed as a simple statistic, or it may be measured as the proportion of employees with a specified length of service (typically one year or more) expressed as a percentage of the overall workforce numbers.
The extent to which employers can maintain their employees is so important for many reasons, but mainly because of expense. Research shows that the average employee exit costs 33% of their annual salary.
There are a vast amount of reasons why an employee may choose to leave their job, but by understanding these reasons and actively making your company more appealing, you can reduce employee turnover.
At Myles Wellbeing, we have researched the reasons why employees may quit and have compiled five ways to prevent this happening, and so improve your retention rate.
We spoke to Michael McCreadie, Co-Founder of Myles Wellbeing, about what he thinks is key to retaining employees. He commented, “Being honest, and so communicating, is probably the biggest thing”. He explained, “Honesty solves so many issues by setting both the employer and the employees expectations on the same page. Ultimately this leads to a happier team and therefore better retention”.
Likewise, when speaking to Marcus Axelson, Head of Sales at Myles Wellbeing, he also commented on the importance of communication. He explained, “With regards to retention, people tend to stay in roles they're enjoying and doing well at. If employees are struggling, it's important to identify any weaknesses by communicating with your team and then coach them to improve their performance”.
Indeed, clear communication allows both the employee and employer to acknowledge any grievances, making it easy to put a clear plan in place to improve your working ways.
As stated above, clear communication is vital. This communication, however, is heavily dependent on the management of your employer. For example, research shows how a lack of appropriate management skills makes employees 4x more likely to quit.
Within this management it’s crucial to have regular meetings with your employees and to provide them with regular feedback, so that they can continue to grow in their company. Marcus Axelson, Head of Sales at Myles Wellbeing, explained his own personal management experience to show the benefits of regular feedback.
He explained, “For me, it's key to have regular check-ins with your team and establish a 'safe space' to speak openly. It can often be work related issues that cause dissatisfaction in a role, but equally there can be many external, personal problems”.
He added, “Having regular catch-ups and being a manager that people feel comfortable to speak to about all things, not just work, allows you to spot employees likely to leave and intervene before this becomes an issue”.
In a post-pandemic era where remote working is on the rise, it is so important that your workplace has wellbeing measures in place. These can include flexibility for people to work from home, or even having schemes which promote wellbeing, such as our own Myles Wellbeing app.
Michael McCreadie, Co-Founder of Myles Wellbeing, commented that, ultimately, to increase employee retention the culture of the workplace is vital. Michael explained, “You want both the individuals in the team and the company itself to continually grow– I believe this happens with good retention, which comes from good culture, and vice versa”.
A working environment which offers the option to work from home is a great company benefit if you prefer flexible working. However, employers need to go beyond this and add more schemes if they want a high retention rate. This is because research has shown that employees who don't feel recognised when they do great work are almost 2x as likely to be job hunting.
Benefits can include small things such as rewarding employees for their work by telling them they have done a good job, to having bonuses, frequent pay rises and flexibility with holiday.
Recruiting replacements for employees who have left is becoming intensely competitive as companies recognise the importance of employee benefits. However, if, from the start, you offer your employees room to grow within your company then you will reduce the amount of employees who do quit.
For example, research shows that employees who feel that they’re progressing in their careers are 20% more likely to still be working at their companies in one year’s time. Through good management, and with mentorship, you will allow your employees to see that they can work their way up in their company if they stay. Ultimately, if you give your staff something worth sticking around for, you’ll save yourself the hassle of recruiting new employees!
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