Keep your best talent with effective employee retention strategies

Do you prioritise employee retention in your business?  The cost of high staff turnover is more than financial and includes:-

• Recruiting a replacement for an individual who has resigned
• Loss of key skills and corporate knowledge
• Potential loss of business if the employee has gone to work for a competitor
• Additional pressure on the time of HR and the line manager who is responsible for filling the post and onboarding the new team member
• Potential disruption to service and reduced levels of customer service as well as possible loss of new business
• A climate of uncertainty and low morale among remaining staff, especially if several people leave within a relatively short timeframe.

The CIPD estimates the average cost of filling a vacancy, including labour costs, is £6,125.  That’s without the reduced productivity of a new starter who can take a couple of months to be familiar with all aspects of their role.  In 2021, the typical time to fill a role in the UK was 48 days, during which time revenue is inevitably lost.  We can help!

Calculating Employee Retention

Retention rate is calculated by dividing the number of employees with one year or more of service by the number of staff in those positions one year ago. New positions added during the year would not be counted. 

However, this calculation doesn’t measure turnover and you can work this out as follows, total leavers in the period divided by average number of employees during the same period and multiplied by 100.

Review and monitor both metrics side by side.

Developing a Staff Retention Strategy

Your approach to improving staff retention should be unique to your business.  The first stage is to understand why your business is losing people and then form an action plan that addresses any common causes of dissatisfaction.  As with anything HR-related, there is no such thing as one size fits all and your solution is likely to be a combination of initiatives.  But rest assured, there are plenty of options to choose from.  

Improving the recruitment and selection process

The way in which you recruit and select staff can directly impact your labour turnover.  If you find that people are leaving within the first six months in the role, it is an indication that you are not recruiting the most suitable people.

Improving onboarding

The successful candidate’s first day is not the end of the recruitment process.  Employees are more likely to leave an organisation within the first few weeks or months if they have not received an effective induction and onboarding.  The more help you can give a new employee to feel at home the more likely it is that they will stay with the business.

Improving management skills for line managers

Line managers have significant influence over the culture within their team and the support team members give each other.  Pay attention to the skills and behaviours of line managers and make sure they interpret and apply company policies consistently and fairly.

Training and development

Many employees value the training and development opportunities provided by their employer more highly than any financial incentives.  Link your training strategy to career progression and succession planning to help employees visualise future opportunities they can work towards.

Offering flexible working

Traditional 9-5 hours no longer suit everyone. Even those without caring responsibilities are seeking greater flexibility with working hours.  If your organisation can accommodate flexible working it is a great way to help employees to improve their work life balance.  Furthermore it can have a significant boost to their loyalty and commitment to the business.

Pay and benefits

You can’t not know about the cost of living crisis currently embracing the UK.  Your business may already be feeling the pinch.  As employees seek higher wages, don’t overlook the value of the total reward statement.  A total reward statement is an itemised statement of all the benefits the employee receives – not just salary.

Non-financial reward and recognition

Get into the habit of giving feedback to your teams.  Make sure they know that you appreciate what they do. You could introduce a recognition scheme that publicly recognises and celebrates when an employee has gone above and beyond. Don’t forget the simple, genuine “thank you” still goes a long way.

Organisational culture

The culture of an organisation is undeniably less tangible than some of the other ideas to improve employee retention.  However, a culture where employees are valued and the management style is supportive and inclusive can significantly increase employee retention and morale within the workplace.

Improving communication

All too often clients tell us that they communicate effectively with their employees.  Yet at the same time their employees tell us they are unaware of business goals and objectives, including those that directly impact their role.  Improving communication with employees is an integral part of boosting the working environment and the culture of the organisation.

Health and wellbeing initiatives

Poor employee wellbeing is linked to high levels of sickness absence and staff turnover.  Employees will often leave a job for reasons directly related to their health or wellbeing.  Taking a holistic approach and investing in health and wellbeing can reduce absence and turnover whilst increasing morale and productivity.  Find out more

Get in touch if you would like help implementing an employee retention strategy in your business.