5 Tips to Improve Employee Retention

The workforce isn’t what it used to be. No one expects to stay at the same company for decades — even three or four years. This is particularly true for millennials, who make up more than half of today’s workers.

Employee turnover costs companies a pretty penny — Inc. estimates many pay up to 150% of annual salary to replace team members. Multiply that by a few dozen for every employee that leaves, and it’s a real hit to the bottom line.

With numbers like that, it makes sense to invest in retention initiatives. Here are 5 tips to help improve retention in 2016.

1. Create an onboarding program.

According to Urbanbound, “organizations with a standard onboarding process experience 54% greater new hire productivity, along with 50% greater new hire retention.”

And don’t make the mistake of making HR solely responsible for HR. “Employees want to be onboarded by their managers and their direct team,” according to Meagan Palatino, co-founder of Uppercase HR. “In general, we discourage managers from relying on your HR team as the sole function responsible for employee onboarding.”

2. Invest in learning and development.

Employees today demand opportunities for learning and development. Deloitte encourages companies to start by hiring “a strong leader.” Great learning teams “spend money strategically, with centralized operations focused on technology, content, tools, and methods. They focus on technical, professional, and leadership programs across the company. They distribute programs locally, leveraging centralized infrastructure and common learning elements.”

If you’re just starting to create a learning and development function, start by auditing any current programs — whether you recommend employees to take MOOCs, hold quarterly seminars, or have lecture lunch-and-learns. Then, make sure that someone in your organization is responsible for learning L&D efforts. Consider both online and offline training options.

3. Encourage referrals with monetary rewards.

Current employees serve as among the best source to find new employees. According to The Undercover Recruiter, companies using referral programs average 46 percent retention, compared to 33 percent for companies searching on career sites.

Referred employees tend to have a better understanding of the company going in — they’ve heard about the organization from an insider, and they have a more realistic picture of the culture and expectations.

When it comes to incentives, cash works best — awards between $2500 and $5000 are the most impactful. Can’t afford that? Try giving successful referrers a few days additional vacation time. And if you can’t swing that, any recognition — whether it’s a mention in a meeting, a small gift certificate, or a special piece of swag — makes a difference.

4. Don’t discount remote work.

“Remote workers are 50% less likely to quit,” reports ERE Media. According to the Harvard Business Review, they’re also more productive. In one study of call center employees, remote workers played 13.5% more calls; meanwhile, the company saved almost $2,000 per employee in furniture and space costs. Obviously, remote work isn’t suitable for all roles; jobs requiring a lot of collaboration are likely a poor fit. But in some cases, it may result in happier, more efficient team members.

5. Prioritize benefits.

You don’t have to be Google to offer enticing perks and benefits to employees. Sick and vacation days are a good place to start. Consider allowing flexible work schedules on a case-by-case basis. Stock options help employees become more engaged in the success of an organization. If you can afford to match 401k contributors, that’s a real plus. If you can’t, smaller perks like catered lunches, sponsored group outings, subsidized commuting costs, and team happy hours can all add up to improve employee engagement.

Want to increase your business’s chances of success in 2016? Our 2016 CEO Resolutions series details a few worthwhile goals to focus on to strengthen and grow your company. See all posts here.