Five retention factors to keep great employees from quitting

By Sue Bingham

With plenty of employees in the private sector quitting their jobs within six months of hire — and many of those in C-suites actively seeking different offers — low morale is an insidious issue your company needs to stay on top of before it sneaks up on you as well.

Engaged employees make the best business partners.

Employees who feel fulfilled perform well and want to come to work each day. They search independently for solutions to the everyday challenges their careers pose and build strong, symbiotic relationships with company leadership and customers.

It should come as no surprise, then, that nearly 80 percent of business leaders view employee retention as an important or urgent issue.

High turnover costs companies big in terms of time, money, and training: To replace an entry-level employee, expect to dish out 30-50 percent of his or her yearly salary. The higher the position, the steeper the cost of replacement climbs — up to 400 percent of a highly specialized employee’s salary!

Cultivating engaged and satisfied employees

The good news is improving employee retention just takes focus, knowledge, and a plan — like any other business strategy. To reduce turnover, take the following steps:

1. Create a great work environment. Few factors contribute more to employee retention — and, frankly, overall business success — than workplace culture.

What I mean by “culture” is the shared values and attitudes leading to behavior that characterizes the way a company functions. Company culture is transmitted through leadership behaviors, policies, language, procedures, and practices. Company culture is learned, shared, and ultimately passed from one generation of leadership to the next.

Barriers to employee retention include a culture where:

  • Employees are not trusted or valued.
  • There is little investment in training.
  • A lack of employee involvement exists.
  • There is a focus on equipment and facilities at the expense of people.

In a landmark survey, culture was noted as one of the most important business topics of 2016, with CEOs recognizing the connection between company culture, employee behavior, innovation, and business performance. In fact, 82 percent of survey respondents recognize that investments in culture yield substantial business benefits and provide a significant competitive advantage.

I have personally witnessed that in vanguard companies where culture is a strategic focus, employees report increased job satisfaction, higher levels of engagement, and a sense of personal achievement. In these environments, it’s not unusual to hear employees say they feel happy to come to a workplace that challenges them to be their best.

CEOs and senior business leaders alike should take a hands-on approach to accelerating culture and intentionally implementing their values. Retaining employees can be viewed as a program or a way of doing business. The workforce can comply or commit; the difference is culture.

Given the importance of culture and the consequences of cultural problems, why aren’t more CEOs investing their time and energy here?

2. Develop strong middle managers. Sadly, most of us understand what it’s like to work for people who don’t care about us or inspire us to do our best work: We underperform, get caught up in petty fights, and might even try to undermine them. In fact, nearly half of all U.S. workers have quit a job to escape an intolerable manager.

For most employees, a manager is the best evidence of the company’s values. If the leader doesn’t embody the values the company holds dear, it doesn’t matter what’s written in the mission statement. It’s been said that “People don’t believe what they read on the walls; they believe what they see in the halls.” The manager is the “first responder” of corporate culture.

In fact, Gallup estimates that the manager accounts for a whopping 70 percent of the variance in employee engagement scores across business units. Sick of chasing the lag measure of turnover? Engagement is a lead measure for retention. A simple way to think about engagement is the extent to which employees are “checked out” — either checked out on the job or actively looking for greener pastures.

By engaging employees through talented and motivated managers, companies actively increase every key metric that defines a highly performing company: productivity, quality, safety, innovation, and retention.

3. Get all aboard for onboarding. With many employees considering quitting during their first month, a new hire’s first impression of the company is incredibly important. Companies with proper onboarding procedures retain 90 percent of first-year employees. What’s the trick to keeping them?

Don’t let new employees sit in the lobby filling out paperwork on their first day! Complete that process ahead of time. The first day should be a warm welcome that includes a team lunch, introductions to other departments, and tips on where to get the best morning coffee or happy-hour beer. Your goal with any onboarding process is to leave new hires feeling they’ve made the best decision by joining your company.

The first 90 days are key. Beyond the 30-, 60-, and 90-day milestones, leaders should regularly check in with employees to deliver feedback and praise, answer questions, and ensure that established goals are being met. Again, it all goes back to consistent, open communication.

4. Show employees that you value them. If employees don’t feel valued, they won’t stay. Period. People devoting 40 or more hours a week to your company want to know they’re making meaningful contributions. Team members who feel valued are more motivated to do their best work and are more likely to stay.

A good way to show employees that they matter is to perform periodic stay interviews — 20- or 30-minute individual discussions between leaders and employees. Stay interview questions are open-ended and allow team members to share whatever is on their mind. They also give you a feel for whether staff members are unhappy or about to quit — an invaluable lead measure that gives you time to intervene.

Investing in employee training is another oft-overlooked way to create a culture of value and retain talent. The time and dollars invested in personal and professional development reflect how much an organization values its people. Most Millennials actually consider training and development opportunities the most valuable benefit their company could provide.

5. Pay competitively. Paying fair wages and providing competitive benefits are crucial elements of improving retention, especially if you want team members to trust your organization. Gallup found that, if offered up to a 20 percent bump in pay at another company, 44 percent of employees would take the new job.

So why stay? Employees stay for many reasons unrelated to pay.

Paying competitive wages and benefits makes pay a nonissue. People view “competitive” as “fair,” and this generates trust that a company is doing the right thing. Conversely, if people don’t believe their compensation is fair, their trust in the company is violated.

Show employees that you’re paying a fair wage (and ensure your leadership is seen as transparent and open) by making salary survey data available to all team members. Employees already know this data, anyway — why act like it’s a state-guarded secret?

Disengaged employees ultimately translate into bad service and dissatisfied customers. Create a company culture that values everyone’s contributions — including employees’ input on new hires — and you’ll not only retain top team members, but you’ll also fly higher than the competition.

This article first appeared at  CEOWORLD