Businesses of all shapes and sizes agree that improving employee retention is a top priority for 2023. Research by Oxford Economics and Unum suggests that the average cost of turnover for every employee earning £25,000 a year or more is in excess of £30,000. Hiring and onboarding costs, and an inevitable lag in productivity, make losing employees an expensive prospect.
Fortunately, staff turnover needn’t be an inevitability. Even in sectors like retail, hospitality and restaurants that historically have fairly low retention rates, have ways in which employers can actively improve them.
Employee turnover rates for 2023
According to HR Review, UK employee turnover rates have been rising steadily for the past few years. On average, employee turnover rates have increased by 8.7% since 2019, with further increases expected in 2023 with a predicted 35.6% turnover rate.
In an economically tumultuous landscape, businesses of all kinds are making a concerted effort to lower staff turnover and boost employee retention rates.
Here are some employee retention strategies and tools that can aid staff retention, helping you to retain the people who make your business special.
1. Focus on hiring the right people
Employee attraction and retention are not disparate practices. If companies are serious about increasing staff retention they need to focus on finding the right person for the job. Skills gaps within an organisation can make hiring employees quickly feel like the main priority. But even in the most urgent circumstances, there are ways in which you can increase your chances of finding good employees quickly.
Some effective ways of doing this, even within a limited timeframe, include:
Revisiting prior applicants for the same or similar roles
Implementing an employee referral scheme
Extending the recruiting process to your social media channels
Include peers who work in the same or similar roles in the interview process
2. Identify why employees are leaving
Companies can improve employee retention by identifying the factors that contribute to employee turnover. Sometimes these will not be within the company’s control. Sometimes they will.
Common culprits include:
Feeling unfairly treated
Lack of managerial support
Unclear communication from management
Exit surveys can be an effective tool for informing employee retention strategies and preventing companies from losing good people for preventable reasons.
3. Invest in effective onboarding
The onboarding process is about more than giving employees the tools they need to do their job. It’s an opportunity to help new employees understand the company’s broader goals and their role in achieving them. It’s a chance to enable new hires to feel more like valued members of the team as quickly as possible, and ensure that they integrate socially as well as operationally. It also helps employees to understand what is expected of them, and what they can expect from you as an employer. Your employee handbook is useful in helping new employees understand this.
Combining a robust onboarding process with mentoring allows companies to build a program of continuous professional development for new hires in line with their career goals and ambitions. This demonstrates that you are committed to them for the long term and see them as more than just the function they perform.
4. Train, upskill and empower
One of the most powerful ways to motivate employees is to invest in developing and diversifying their skills.
Don’t make the mistake of limiting training to the onboarding process. Actively encourage employees to build upon existing skills and learn new ones. Identify opportunities for upskilling and cross-skilling. Impart skills that will allow employees to work more effectively in different departments, rather than keeping them siloed. Work with employees to ensure that they have the skills and training necessary to achieve the next step in their career, rather than keeping them confined to one department, performing one set of functions.
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5. Offer flexibility
In the digital age, many candidates no longer view flexible working conditions as a novelty but as a necessity. With the tools tocollaborate with colleagues and participate in meetings from absolutely anywhere at their disposal, many companies have begun to opt for hybrid working models. This is where employees divide their working time between their homes, company HQ and, in some cases, a shared office facility that’s equidistant between the two. As well as autonomy over where they work, hybrid working empowers employees to control their work-life balance. Research by flex-space provider Regus suggests that 87% of employees prefer to work the hybrid way. Companies that want to increase employee retention should consider adding more flexibility to their scheduling and working arrangements.
6. Reward and recognise
Remuneration is important. But it’s not the only way employees want their efforts to be rewarded. Many employees actually prioritise a workplace culture where their contributions are formally recognised as well as financial compensation.
Implementing an employee recognition programme is an invaluable way of celebrating employees’ achievements and sharing best practices. It can also be a powerful tool for reducing staff turnover. Research by Gallup shows that employees whose efforts are not recognised are twice as likely to leave their jobs. Businesses that have an established employee recognition programme, however, enjoy a 31% lower voluntary turnover rate.
7. Show you care
Studies show that staff retention rates soar when employees feel like their employers care about them. Research by the Limeade Institute in the US showed that 60% of workers who said they felt cared for planned to stay with their companies for three years or more.
Show your employees that you care about them as human beings, not just in terms of how useful they are to your business. Some ways you can do this include:
Celebrate their birthday
Offer bonuses or company equity
Treat them to the occasional lunch or happy hour
Allow them the flexibility to plan work around their needs
Provide wellness offerings, e.g. gym membership, private health insurance etc.
8. Leverage automation to reduce administrative workloads
What makes a happy workplace? There are many answers to this. But endless and repetitive admin tasks are not among them. Trimming the fat from business processes can help reduce employees’ administrative workloads and leave them with time for work that is more meaningful and engaging.
Likewise, a digital infrastructure made up of disparate solutions from different companies can add unnecessary friction to workflows. Having an all-in-one, a mobile-first system like Square’s ecosystem of business solutions reduces time spent on repetitive and time-consuming admin tasks like shift scheduling, tip tracking and data management. Leaving your team free to do more of what they find rewarding.
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