In Pursuit of Profit
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Recent data shows that on average employees change jobs every 15 months. Contributing to this turnover is a lack of employee satisfaction in the workplace. Globally, 85% of employees are unhappy at work, resulting in diminished productivity and increased employee churn. Furthermore, survey data shows that 40% of dissatisfied employees change jobs as a result of their dissatisfaction.
Top employers understand that replacing employees is expensive and can thwart efforts to innovate and grow revenue. In fact, it can cost up to a third of an employee’s salary to find a replacement. And while employee turnover can cost a company greatly, employee retention can increase profits as well as provide a host of other benefits.
Reducing costs and boosting revenue makes employee retention a win-win. Improve employee retention rates this year by investing in your employees in six critical ways:
Play to Employees’ Strengths
Help employees to flourish by giving them chances to play to their strengths in their roles. Tasking employees with responsibilities that they are ill-equipped to handle, or do not want to do, reduces job satisfaction. Outsource roles that typically get added to other less qualified employees’ plates when the company is starting out, like bookkeeping and accounting.
Employees are 12 times more likely to leave a company when they do not feel like they are developing.
Prioritize training and educating employees when doing annual budgeting. Providing internal and external training opportunities makes employees feel valued and equips them to handle more responsibility, improving retention and expanding core competencies. Facilitate additional learning opportunities by removing barriers to pursuing additional degrees or certifications. Consider providing tuition reimbursement and offering flexible work schedules to make attending classes more feasible.
But do not limit learning to the classroom. Allow employees the freedom to make mistakes and learn from them. Remember, on-the-job learning is invaluable for employees at all levels. Do not allow managers to take away these opportunities through micromanagement. Micromanaging subordinates disincentivizes employees, destroys teamwork, and fuels burnout, driving top talent away.
Build Confidence in Senior Leadership
Survey data shows that employees with “high confidence” in their organization’s senior leadership are five times more likely to remain with their employer than employees with “no confidence.” Hire the highly qualified candidates into executive roles and let them utilize their experience to lead the company in a way that inspires confidence. Build trust in management by communicating a clear strategic vision and charting progress against that overall goal to keep all employees on the same page.
Of employees surveyed, 23% reported that increased transparency would make them more motivated to work hard and 14% would be less likely to take another job offer. Employers looking to improve retention are transparent during periods of both prosperity and difficulty. This communication from executive leadership is crucial in increasing job satisfaction, as is communication from direct managers and between cross-functional teams. Managers at all levels should regularly ask employees for feedback and genuinely listen to their input, getting buy-in on policy changes and new company initiatives.
According to recent data, 75% of the causes for employee turnover are preventable. Losing employees to feeling unappreciated or underappreciated is likely the most preventable cause of turnover.
Put real consistent effort into expressing appreciation for employees instead of just assuming they feel valued. Do not overlook the impact of the little things like a hand-written note, kind words in a performance review, or a box of chocolates. Ensure managers are formally showing appreciation for their direct reports in the form of praise, compensation, or other perks. Create employee milestones (hiring anniversaries, product launches, etc.) and celebrate them to make staying with the company feel special.
Always incentivize employees to do their best work. Remember, incentives do not have to be just financially based. Rewards come in all forms, including awards, company-wide recognition, additional time off, local memberships, branded merchandise, upgraded technology, lunch delivery, and other unique benefits. Solicit employee feedback on which types of rewards resonate most with them.
One of the most effective ways to reward hard-working employees is to promote them. Upward mobility encourages retention because employees are more likely to find satisfaction in their job functions and stay with the company for longer.
Set measurable and fair performance goals from the time of hiring that are adjusted based on ongoing business goals and the evolution of job functions. Then provide regular performance-related feedback so employees understand where they are succeeding and where they have room for improvement. Reward employees for the good work that they do and rehome work that they do not excel at when there is a mismatch of strengths and necessary skills.
Do not task underqualified employees with activities as important as your bookkeeping and accounting functions. Instead, hire a third-party accounting company to handle these roles for you.