I’m back with our regular feature about the Return on Employee Investment (ROEI). Throughout the series I’ll speak directly to what ROEI is, how organizations can maximize it and how they can calculate it.
While some turn-over is unavoidable and to some extent even desirable, turnover among your top performers is largely avoidable. And it is certainly worth the investment. People don’t necessarily tell the whole truth in exit interviews about why they are leaving. Managers should, of course, know in advance who is leaving and why.
A high turnover rate is likely due to a combination of reasons. Thus, increasing employee retention also requires a combination of measures. An employee will be motivated to stay at a company when they feel comfortable, well respected, fairly compensated, and (dependent on position and character) see possibilities for growth and personal development. Here are some of the areas an employer can invest in to lower the employee turnover rate:
It is clear that no manager can make informed decisions without proper information. HR or employee analytics can help management y decide where to invest, identify the top performers, determine what employees need to best perform and what they value. Analytics also give provide a consistent way to monitor the results of any measure taken, HR analytics really are the ace up your sleeve.
Modern human resource management systems contain a wealth of information that can give managers and executives the insight needed to make the best possible decisions about the workforce.
A lack of (or poor) communication, both top-down and between teams or peers, causes frustration and misdirected energy. For HR departments, communcation is key and company communication can be greatly enhanced by publishing the company’s values, vision and mission. Provide easy access to the company handbook. Make use of the technology for employee self-service portals and performance appraisal systems and encourage employees to use these available resources.
BusinessWeek cites that a “San Francisco design firm Gensler found that of more than 2,000 workers around the U.S., two-thirds believe they are more efficient when they work closely with their colleagues. But 30% said that their workplace doesn’t promote spontaneous interaction and collaboration—a sentiment that’s leading many companies to rethink the office environment.”
Widespread usage of social media and web 2.0 technologies has proven that these spontaneous interactions and collaboration are no longer limited by physical borders. Employee collaboration and business social networking have already demonstrated value in terms of improved employee performance, creativity, communication and informal learning.
Most companies reward employees and recognize a job well done with a combination of compensation and benefits. But there are many more tools in the employee reward arsenal. To compete in the global workforce environment, an effective employee recognition program is a necessity.
Successful recognition programs motivate workers in ways that increase their level of engagement. According to the Human Capital Institute (HCI), “best practices” for applying recognition programs include:
- Creating a culture of recognition in the workplace that includes both formal and informal methods of recognition.
- Making sure that employees get rewarded in a way that is valuable to them by providing a wide variety of recognition rewards. Emphasizing higher quality performance, rather than just increased amount of effort.
- Recognizing employees frequently to maintain consistent engagement.
- Ensuring that rewards are linked solidly to business objectives and/or desired business cultural values.
Effective training and development programs are excellent instruments to reduce employee turn-over. When employees feel like their careers can develop no further at an organization, it is often time to leave. Good training programs can help your employees learn the skills needed for new projects and challenges, or even a higher position within the company.
Compensation and Benefits
Without an adequate and competitive package of compensation and benefits, it is difficult for any company to hire or retain top talent. The challenge for small-business owners is figuring out how much their competitors pay, and what package of benefits deliver the best retention results. If the main goal is to motivate talent to stay with the company, in other words to create ‘stickiness’, it is important to choose a balanced package of benefits from many available programs:
- Work/Life balance: Holidays, paid time off, flexible work arrangements
- Financial security: Retirement plans, pensions, disability insurance, life insurance
- Health and medical insurances: health insurance, dental, vision flexible spending or health savings accounts, gym memberships
- Career development/Personal growth: Tuition reimbursement, onsite lectures, computer based training subscriptions
- Other: Discounted auto, home, or pet insurance, savings clubs for shopping, employee loan programs to purchase computers.
What do you think? Does that list do a good job summarizing it? Has your company offered any other benefits to help increase employee retention?