A version of this article was previously published in the August 2017 edition of Digger Magazine.
It’s easy to understand why employee retention is important: It supports business continuity, preserves institutional knowledge, prevents competitor poaching, lowers recruiting and onboarding costs, and increases productivity. This is why companies stand to benefit when they spend the necessary time and money to improve their employee retention rates.
One of the biggest factors that impacts employee retention is employee engagement—a significant challenge for many businesses. The Gallup Poll has measured employee engagement since 2000, and the results are alarming. Annually, they survey approximately 100,000 workers who are 18 years of age or older to determine the level of employee engagement across the United States. Consistently, the results indicate the following:
- Approximately 33% of employees are engaged, involved in, enthusiastic about, and committed to their work
- Roughly 50% aren’t engaged and are instead going through the motions
- Almost 17% are actively disengaged and making an effort to work against their employer to prevent it from achieving its goals
The productivity loss associated with this lack of employee engagement is estimated to be $500 billion per year.
Employee engagement is low because companies often don’t take the initiative to engage their employees. Doing so isn’t difficult, but it does require a plan and a commitment to adhere to it.
Three Key Initiatives
There are three practical initiatives—strategic, tactical, and personal—business owners and leaders can take to achieve high employee engagement, strengthen employee retention, and ultimately, operate as a high-performing company.
Strategic: Prepare a Roadmap
Every company needs a roadmap that provides an overview of its current state, desired future state, and what it’ll take to move it from where it is today to where it wants to be in the future.
Once a roadmap is created, employees need to understand their employer’s plan so they know how they fit into it. Without knowing what their employer’s plan is, it’s difficult for them to feel engaged.
It’s not just the plan itself that’s important. Meaningful employee commitment is achieved when employees are also engaged in the development of the plan. Businesses can encourage employee participation by asking for their input on topics, such as:
- Keys to success
- Necessary changes
- Organizational strengths, weaknesses, opportunities, and threats, commonly known as a SWOT analysis
Companies can also involve employees by requesting feedback on plan components, such as mission, vision, goals, and priorities. Receiving this input and feedback is easily facilitated through the use of online survey tools.
Tactical: Define Performance Expectations
Once a plan is in place, a company needs to articulate the performance expectations required to execute the plan. In other words, it must define the specific actions and quantifiable results required to achieve the plan. One of the keys to successful performance is making sure individual employee performance is aligned with group performance and that group performance is aligned with company performance. By defining performance expectations for each level of the business, employees learn what it takes to achieve the plan’s goals.
For example, company performance metrics might focus on revenue growth and net profit; department performance metrics might focus on expansion into new markets, streamlining processes, and reducing costs; and individual performance metrics might focus on enhancing skills and improving teamwork. The key is for employees to understand how their actions help their group achieve its objectives, which in turn, helps the company achieve its goals.
Personal: Quantify Total Rewards
With the ever-increasing price of health care, benefits comprise a significant cost to both employees and employers. However, companies often don’t do a great job of conveying the overall costs of the benefits they offer. This means employees don’t understand the value they receive from their company’s contributions to those benefits. Instead, most companies focus on cash compensation, including salaries and bonuses.
An effective way to gain credit for other types of investments in your employees is to provide a total rewards statement that quantifies the value items, such as:
- Cash compensation
- Health care premiums paid by the company
- Retirement benefits, such as 401(k) employer contributions
- Training and development
Greater awareness of a company’s total rewards package translates into enhanced employee appreciation for the investments their employer is making in them.
Employees who understand how they strategically, tactically, and personally contribute to and benefit from being part of a company are more likely to stay and give their best effort, helping their employer to become a high-performing business.
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For more information on how to implement a stronger employee retention program for your business, contact your Moss Adams professional.