You may not have an employee retention problem today, but that doesn't mean you might not have one tomorrow. Organizational shifts, changes in strategic direction, alterations to benefits and compensation or even a little bad press can cause your people to start looking for the exit. And since they're not going to tell you that they're searching for new opportunities, you're going to find out the hard way. By then, it's too late.
So it's easy to see how turnover and poor retention can cost businesses $11 billion dollars annually. That's right — billion with a "b." That means you need to have an employee retention strategy in place ASAP. Here's where to start.
listen before you talk
The first step in building an employee retention strategy is listening to employees who are leaving. Even if you aren't facing crisis-level turnover at the moment, it's still wise to conduct exit interviews with departing employees to find out why they're resigning— and what you might've been able to do in order to make them stay.
You should encourage your employees to be as candid as possible, and remind them that their feedback won't lead to a negative reference or any other type of punitive action down the line. Make it clear that you'll use this feedback to address issues and make life easier for their former colleagues. Also, it's best to keep their managers out of the equation. The exit interview should be administered by a neutral HR person and done so in a private setting. Some questions to consider asking include:
- What factors contributed to your decision to leave?
- Is there anything the company or your supervisor could have done differently?
- Do you feel you had a clear career path in this organization?
- Did you feel challenged in your day-to-day role?
- Do you feel as though you were compensated appropriately relative to your skills and experience?
- What would you change about the company's culture if you had the opportunity?
These aren't all the questions you should ask, of course. But asking questions like these can help you gain vital information and curb retention going forward.
leverage what you learned
Gathering all the feedback is the first step. The second? Actually using it. That's where many organizations fall short — they know what their problem areas are, but they have no plan for addressing them. So take what you've learned from your exit interviews and use it to craft a plan.
Was compensation a common factor? If so, consider reevaluating your compensation and benefits packages, and find out if what you're paying is comparable to the competition. (Actually, you should do that anyway — and do so regularly.)
If departing employees frequently said they lacked a clear path forward, address this by making sure that every role has a documented career path in place. Also, make sure it's clear to employees exactly what they need to do in order to advance. There's nothing more frustrating than working your hardest toward some nebulous promotion that may or may not ever happen.
If they said they weren't challenged or weren't learning new skills, that's a relatively easy area to address. Encourage your managers to offer top performers the chance to take on special projects or serve on cross-functional teams. If those projects or teams don't exist, create them. There's always something that needs to be done, and your employees will welcome the chance to step outside their daily routines and tackle something new.
And don't neglect the professional development angle, either. Employees 25 and under rate professional development as their biggest driver of engagement, and those aged 35 to 44 say it's number two. These folks are hungry for new skills they can use to advance their careers, and you're far more likely to keep them if you provide training in the areas they value most.
get leadership involved
No single person can stem the tide when a retention problem strikes. It takes everyone to make the often-sweeping changes needed to reverse a retention crisis. But when it comes to retention, change starts, as it often does, at the top.
Start by making it clear to your company's leadership that retention is critical to business success. The fact that it costs 21 percent of an employee's salary to backfill the position should be sobering enough, but also stress the fact that one departing person can have a "butterfly effect" across your entire organization. That means that when one person quits, their teammates often shoulder the burden of that workload until a replacement is found. And when that takes weeks or even months, you're looking at a team that's destined for burnout — which means you're likely to see additional turnover as a result. That soon starts to snowball into retention problems, so having a plan in place is critical.
Further, leadership needs to take an active role in retention by actually leading. According to Deloitte, that means having managers play a coaching role, rather than just doling out direction. In his seminal Harvard Business Review article "What Great Managers Do," consultant Mark Buckingham noted that great coaches understand their employees' strengths, put them in position to leverage these strengths and guide them to develop these strengths even further. That may mean getting a little coaching for your coaches, but it's worth it if it helps your organization retain top talent.
measure and manage
Once you have a retention strategy in place, you need to track its impact on performance on an ongoing basis, and make adjustments based on your findings. Set up quarterly retention deep-dives, and look at how you're trending in terms of overall retention and tenure. Examine which functions or teams seem to be hot spots for poor retention, and refer to the exit interviews to determine the causes.
The solutions won't always be obvious or easy, but if you can save your company's top talent, you can save a substantial amount of revenue. And leadership's definitely going to get behind that.
But you don't have to go it alone. Click here to find out how the right partner can help solve your retention woes so you can focus on helping move your business forward.