The modern era in which we live requires certain changes in its organizational structure, but also in the methods of business management. With the arrival of millennials, we see that the standards in the labor market are increasingly questioned. Indeed, the majority of people now prioritize a work-life balance that is different from previous generations. To keep employees, managers must find ways to accommodate the needs of employees and often be flexible in certain respects. Do you want to know why it is so crucial to retain your employees? The following article will guide you in how to measure retention, the consequences of a low retention rate, the benefits of investing in your employees and how to adapt your management methods.
Why improve your staff retention rate?
In fact, the mass arrival of a new generation of young adults on the labor market and a change in mentality catches many managers off-guard. If organizations do not adapt quickly, their resources will not hesitate to seek refuge with companies offering better working conditions.
A low retention rate has very serious consequences on an organization.
Indeed, hiring employees requires significant costs such as:
- Initial training costs;
- The hiring costs;
- Development costs;
- Costs related to the employee (payments, requests, etc.).
These have a significant accounting impact. If every year you repeat the same process, depending on your industry, it may take time before an employee becomes an expert in his field.
When you lose employees, you lose the expertise of your business. Also, some employees take time to build a relationship with a new person. A low retention rate can therefore affect the motivation and morale of a team. This can cause a cold working environment and a loss in productivity.
Here are some tips that might help you:
Make an analysis of the current situation
According to the publication "Barometer RH 2016" by the CHRP College, almost half of a company's employees may change over a period of three years. So how can you reduce this figure that seems to grow every year? We must first analyze your current situation.
Here is a simple retention analysis method:
- Calculate your retention rate on an annual basis (or a period you're comfortable with) ;
- Identify the reasons for voluntary and involuntary departures (layoffs);
- Find the reasons why longer- term employees stay;
- Analyze everything and highlight what comes up the most often.
- This will give you an overall picture of the situation and then make an employee retention plan.
(Number of employees at the end of the period / (number of employees at the beginning of the period + number of new hires))
In order to increase employee retention rates, strongly encourage collaboration among members of your organization. It will implement an effective communication system, which will allow you to know the wishes of your employees for collaborative work.
That being said, team work can sometimes be synonymous with conflict. Indeed, collaborating on a project with someone with whom the chemistry is not there may cause a loss in motivation and productivity if the problem is not resolved quickly. We must therefore ensure that everything flows smoothly within the team. If there is a conflict, ask your employees to notify you promptly.
A good team synergy allows, among other things, to excel and reach new heights. Successful teams succeed because they have the tools and are well supervised.
After all, employee retention is closely linked with happiness at work.
Invest in your teams
Loyalty also requires benefits to be offered to your employees.
Here are two examples of little things that often make a difference for some employees:
Staff Benefits are important for the retention of an employee. Indeed, companies with the best benefit plans tend to have a higher retention rate. Whether a retirement savings plan, company shares, group insurance or even exclusive discounts for certain stores, these benefits weigh in the balance of employee retention.
Treat yourself to a laptop or a cellphone for travelling? Enjoy a flexible schedule and comfortable places to relax? Your employees need to work in a pleasant and healthy place to be at their full potential. Giving importance to such details prove that you value the well-being of your employees and team work.
Take the time to consult with them to find out what really motivates them. You will be able to integrate these elements into your action plan.
Ask yourself this question: what costs more in the long run, losing employees quickly or investing in them?
Show leadership (and find good leaders)
Leadership often plays a large role in employee retention. No doubt your management practices have a direct impact on the happiness of your employees. Indeed, Roger Herman, a specialist in employee retention, says that 75% people who left a job by themselves did not dislike their position, but rather their boss.
That is why all the people in your organization who have employees to monitor should receive training in management, it is precisely to establish a retention policy or provide the necessary knowledge in management.
The advantage of having good leaders in your company is the fact that your employees see them as role models. In the end, your employees will develop a stronger sense of belonging and a greater motivation.
Finally, employee retention is a job that affects everyone in your organization and provides enormous financial and organizational long term benefits. It is therefore important to plan this strategy. Support your teams in development, employee training, and remember happiness is not an expense, but rather an investment. And do not hesitate to consult with your teams to develop your strategy and help you implement it.
In the long run, your business can only benefit from it.
A Chartered Professional Accountant (CPA) and Certified Corporate Director (ASC), Chantal Dufresne is a manager with more than 20 years of experience in the operational management of small and medium-sized businesses. She held management positions in several accounting firms and worked in a self-employed capacity for a few years. With this background, she brings to AGA her skills and technical knowledge in financial accounting, management and administration. As a board member, she helps define the strategic direction of the organizations she assists and distinguishes herself through her expertise in governance, internal controls and risk management.
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