Attracting and acquiring top talent is difficult for any company, but even more difficult is to retain them.
Some companies are of the view that the estimate of the cost to replace an employee is about two times the annual salary of an employee.
Retaining key staffers who are no lesser than an asset to the company is tricky.
So, here we discuss elaborately why does employee retention matters, what is it, why employees leave and the top 10 employee retention strategies that companies use.
Loss of organizational talent over a period of time is an important issue for any organization.
There has been a spurt in the number of employees quitting jobs voluntarily or involuntary especially after the pandemic.
Let us see what companies are doing to prevent this invaluable loss.
What is Employee Retention? A Quick Look
Employee retention is any organization’s ability to prevent employee turnover or staff quitting jobs in a certain period.
Companies that are able to retain their employees have long-term success and show better performance.
Employee retention is high on the priority list for all the leading companies these days.
A meticulously planned employee retention strategy reduces costs linked with replacing lost employees.
The top employers recognize the subtle signs that show employees may leave, and they begin to work towards retaining them to prevent loss to their companies.
Why Does Employee Retention Matter?
Employee retention has become an important task of the modern-day Human Capital Management Programs.
According to a recent survey, United States businesses have lost more than 1 trillion dollars a year to the loss of their employees. Employee retention is crucial to any company.
Top SaaS companies like Google have introduced top wellness programs and many work benefits to motivate their staff.
Apart from offering one of the best packages in the industry, employees here get a lot of perks like free meals, free health and dental check-ups, free online physicians, a gym, spa and a lot more.
By focusing on employee retention, companies benefit in multiple ways. They can cut down on their recruiting costs and expect greater returns.
Loss of employees does not mean a financial loss to the company alone. It is a setback to productivity also because a new staffer must train to get up to the speed of their predecessors.
Most of the time, companies face lower output and lower-quality work. It may lead to the increasing customer dissatisfaction rate and loss of morale of other employees.
So, in a nutshell, retaining the top talent in the organization is as important as recruiting them otherwise, it results in financial loss & declined productivity.
Why Do Employees Leave a Company?
There are certain common reasons that employees cite for leaving any company.
Some of the reasons are as follows. If the companies can work on these things, the brain drain problem can be done away with permanently.
- Inadequate remuneration (In a survey conducted by a job site, major figures of quitting employees cite the reason for inadequate salaries)
- Benefits, perks and compensations are not as per the market standards.
- A lot of stress and excessive workload.
- No progress in career and skills not being used.
- Failure to strike a balance between work and life
- Lack of appreciation and rewards
- Dissatisfaction with the management and bosses.
- Other more compelling job opportunities
- Apprehensions about the company’s future.
- Failure to mingle well with the company’s culture
Hire Just the Right People for the Job
The hiring process is important so it needs to be done meticulously.
Most of the top companies like Salesforce is particular in assessing all the skillset of the candidates that they think they would require.
In the interview process, the candidates are made aware about the culture of the company and the job profile and evaluated on how they can prove to be a fit.
The retention rate automatically improves once suitable candidates get selected.
More than just apt qualification and experience, the overall aptitude and attitude of the candidates matter.
Are they willing to learn?
Do they have leadership qualities, patience, good communication skills, flexibility, etc.?
These important set of skills should be evaluated right during the interview to improve the retention rate.
Having Employees’ ideas And Insights Heard
Many SaaS companies boast of high retention rates.
They have a simple strategy of getting the ideas and insights of their staff heard.
This not only helps their employee feel a sense of gratitude but improves their engagement rate also.
Not only the ideas of top-level employees but the ideas of the junior staff should also be heard and recognized.
A lot of blooming SaaS companies already have open-door policies where their employees can speak straight to the executives.
However, when the companies grow, these policies take a back seat.
One great way to prevent this is to hold “office hours” every week to encourage real-time interactions with the employees where they can not only put their ideas but can talk about their grudges and complaints too, which should be taken action by the company.
This is an effective employee retention strategy for SaaS companies and other companies.
One-on-One interactions Between Managers And Juniors Should be Encouraged
“A happy and satisfied employee does not go anywhere”.
Most of the companies have a traditional way of formal performance reviews.
Regular meetings with the employees where their job satisfaction rate and company future can be discussed should be encouraged. Dynamic performance assessments help employers find out the engagement rate of employees.
Sprinklr is one of the top-performing SaaS companies where managers have one-to-one interactions with the executives, and they are asked to index their happiness and satisfaction rates on a scale of 1-10.
Creating Opportunities for Professional Growth
One of the reasons why employees leave a company is that they are tired of the monotony of doing the same work again and again.
They just run away when they do not see professional growth in the company.
A survey conducted by LinkedIn for its Workplace Learning Report says that as many as 94% of the employees quit a company because they see a lack of professional growth.
SaaS companies with the best employee retention programs have an internal training process to upskill their existing workforce.
It is to be kept in mind that curious employees who are constant learners are no less than an asset to the company. Hence companies should work towards upgrading their skills.
Orientation and Onboarding
Every recruit should be well-prepared for success right from the beginning.
So, the onboarding process should teach new employees not only about the jobs but also about the culture of the company.
The employees should feel comfortable with the work environment. They should know whom they got to work with and how; hence, orientation is important.
Prevent Your Employees from Feeling Overwhelmed and Overworked
Overworked employees are highly dissatisfied employees who leave the company at the earliest opportunity.
Researchers from Stanford have found that long and tiring working hours can decrease a person’s life expectancy by 20%. Nobody will like to work at the stake of health.
A report from an authorized body has found that about 40% of the managers and 34% of the employees in today’s corporate world suffer from extreme stress, which is the sole reason employees quit.
Providing employees with the opportunities like flexible working hours and work-from-home results in enhanced productivity, better efficiency and satisfied employees.
Creating Flexible Working Arrangements
A lot of companies are under the wrong impression that making employees come to the office is the best way to make them work optimally and retain them.
Contrary to this, today’s top talent wants to work remotely from the comfort of their homes, which can save their time commuting.
Employees can perform their best when they get an opportunity to work at a place and at a time they want. This leads to a high satisfaction rate and can prevent talent drain.
Ever since the pandemic struck, a lot of companies are offering “Work-from-home” opportunities to their employees.
Still, the top SaaS companies like Google and Salesforce have had this opportunity for their employees much before that.
The demand for employees to be present at the set office hours leads to a brain drain from the company.
Continuous Feedback on Performance
Most of the employers just avoid the performance review this is a major reason why employees begin to work reluctantly and leave eventually.
Frequent meetings with the team members to discuss short-term and long-term professional goals, to give regular feedback about the performance of employees and to talk about their career advancements is a sure-shot way to keep them engrossed and motivated.
Provide them the Best Financial Rewards
Top talent knows they deserve the best remuneration; hence, when adequately paid, they leave for a company where they get a better package.
Therefore, one of the proven Retention strategies is to pay well and above the market standard to their employees, especially those they cannot afford to lose.
Apart from a good salary they should be given perks like bonuses, free health check-ups, facility for loans, paid maternity and sick leave and other compensations from time to time to reward their good performance and to keep them motivated.
Create a Favorable Work Environment
Most of the time, junior employees of the companies leave following issues with their managers or others at the top levels.
This can be prevented by creating a favorable work environment wherein neither the managers nor the junior staff should feel worked up.
Both managers and junior staff should have their goals clear in their minds. Regular meet-ups to discuss any bone of contention and how it should be resolved are highly recommended.
Focus On Their Health
Long working hours at the desk leave your employees tired and feeling miserable.
Apart from that, sitting continually for hours can lead to the issues like back pain, indigestion, obesity and a lot more.
Companies that focus on their employees’ health can retain them for a long time.
Employees should not feel like their workplace is affecting their health adversely. Otherwise, they may quit. The best SaaS companies like Google know this well, so it primarily focuses on health.
Google offers an in-house Gym, swimming pool, regular sessions and a lot more. It is also focused on keeping periodic employee assistance programs focused on mental health. It also offers onsite wellness centres and workplace accommodations for any time of physical or mental health issues.
Break the Monotony of Work
The last thing that a company wants is reluctant employees.
However, this is a common problem in all companies.
The same set of schedules comprising meetings, reports, CRMs, feedback, deadlines and more leads to monotony and many employees, especially junior ones, run from the company where there is nothing to keep them well-entertained, leave them bored.
Some examples of the leading SaaS companies always try to get the best out of their employees by making them work when they want.
Conducting company fairs, parties, trips, and other fun-filled activities should be incorporated into the culture of every company that wants to prevent the loss of their valuable employees.
Retaining the top talent should be the priority of any company because the drain of manpower from a company leads not only to financial losses but results in a decrease in productivity plus declining morale of other employees.
To prevent employee turnover, companies must build strong communication with their employees, address their problems and compensate them well.
Employee retention strategies and tactics to keep employees can be best learned from the top SaaS companies where employees just get recruited and leave on their involuntary retirement.
After all, every company needs skilled manpower as much as the latter needs jobs.