Retention Tips to Keep Top Talent
A recent article by Cameron Keng on Forbes, “Employees Who Stay In Companies Longer Than Two Years Get Paid 50% Less” demonstrates one of the key reasons why it is becoming more difficult to retain top talent. Keng’s argument was that in 2014 the average (U.S.) employee will receive less than a 1% pay rise. However, the average increase an employee can expect for leaving their place of work is between 10% – 20% (and can potentially be more than this). In Australia, ABS figures for 2014 demonstrated a slightly higher annual rate of 2.6%, however this is the slowest growth on Australian records that date back to 1997.
A huge cost for businesses is employee turnover and some of these costs are difficult to quantify. They can include direct costs such as advertising, recruiting, hiring, termination payouts and pre-employment reference checks, as well as possible medical tests and more. There are also a range of indirect costs. These include a loss in productivity while the job is vacant, and also interviewers’ and trainers’ time.
In addition there will inevitably be a loss in productivity while the new employee settles in. You can use an onboarding checklist (download the Launch Recruitment New Employee Checklist here) to assist you to reduce the time this can take.
Retaining Key Talent Requires Thought and Planning
- What do your employees think about your company?
Make sure to keep the lines of communication open between staff and management. Here are a few tips for doing this:
a) Spend some time informally chatting over a cup of coffee.
b) Give your staff feedback. You can do this in a formal performance review or during informal meetings. Employees need to understand where their own performance aligns with the business’ goals.
c) Take advantage of some of the better ideas suggested by staff.
d) Try surveying your employees for their thoughts on the company. You can try one of the online tools such as Survey Monkey to save you time when setting up a survey. You can also set up a private Facebook group and use one of the polling apps. There are a number available including some free ones.
2. Why do people leave your company?
a) It is important to conduct exit interviews to allow an employee to give constructive feedback about your business and their role in it.
b) If you do not feel as though these interviews are giving you an honest response, consider involving a third party who may be able to ask questions more informally.
3. Are your rewards programs enough?
a) Consider offering added benefits beyond pay rates.
b) Superannuation, health benefits, and leave, as well as education and training, can also have an impact on employee retention.
c) Look at building an employee incentive program. Set clear goals and select rewards that align with those goals. Incentives have been found to improve performance.
The recent Sunsuper 2015 Australian Employee Insights Report found that 64% of Australians said that “good pay” was the most important factor that would keep them in a job. 39% of surveyed Australians have received an incentive to stay with or join a company. 24% said that the best incentive they had received to stay with an employer was a company funded education course.
When asked about their “dream job”, the highest percentage of respondents, 16%, stated that this was a position that allowed them to work from home. The same study found that 26% of respondents said that boredom was the main reason for leaving a job
Interestingly, while on-boarding and retention incentives are regularly used by management as a way to attract and keep key talent, the study found that more than half (61%) say they have never received an incentive to either join or stay with a company.
The Eskill blog recommends using some creative methods to keep talent. These include:
- Offering stock options to your company.
- Developing a workplace that is free of restrictive policies and values the response of staff.
- Offering a career path that encourages “big dreams”.
Since 64% of Australian employees’ state that “good pay” is the biggest benefit that would keep them with a company, clearly one important way you can keep talent is by ensuring your compensation packages are at industry levels.
Aim to create a workplace that fosters staff comments and creativity, provides incentives and education, training, and career advancement opportunities. If possible, offer flexible work arrangements, such as allowing some hours for staff to work from home.
While it is important to remember that staff can often gain a bigger salary by leaving your company to accept a better-paid job, it is also obvious that this is not the only reason that Australian employees will resign from, or stay with, a company. Keeping staff informed, happy, engaged, feeling valued and with some flexibility in their job is also key. Take advantage of these tips to increase your chances of retaining talent and ensuring top performances from your staff.