Improving staff retention
With the finance market becoming increasingly candidate short; there has never been a more important time to focus on staff retention before employees feel the need to explore the external job market.
A Wall Street Journal states that: “Experts estimate it costs upwards of twice an employee’s salary to find and train a replacement”.
"How to Reduce Employee Turnover" The Wall Street Journal (2016). Web. http://guides.wsj.com/management/recruiting-hiring-and-firing/how-to-reduce-employee-turnover/
As well as the financial implications of a high staff turnover rate, this will also have repercussions with regards to losing knowledge and expertise, decreasing performance, and lowering the morale of remaining employees.
With that said, when certain staff members leave, this can potentially have a positive effect if for example the personality of that person negatively affects the overall team culture/atmosphere. Bringing in new employees also delivers fresh ideas, and approaches, and can increase morale.
Another positive impact of some staff turnover can be to avoid complacency. There is a human tendency to believe that what we achieve yesterday is good enough to get by today; this attitude has a bigger and more detrimental impact on an organisation.
Ignoring high levels of staff turnover can be very costly, it has been said there is an optimum level of turnover, therefore it is imperative to understand the reasons why people resign, and whether they are “push” factors away from your business or “pull” factors to other opportunities, to ensure your business finds the right balance.
Counter offers should be the last resort
It is a common perception within the finance market that counter-offers are the last resort when looking to hold onto employees, and at this point it is in the best interests of the employers for them to stay, not for the individual who is potentially leaving.
There is a statistic that 60% of people who accept a counter-offer and remain with that business; end up leaving within the next six months.
When a counter offer is made this is how it can be perceived by the employee:
- Delayed recognition: the only reason they’ve counter offered is to solve their problem.
- Increased salary doesn’t solve all issues: e.g. progression potential, team atmosphere, relationship with manager, breadth of role, feeling valued.
- Broken trust/loyalty: to be always seen as a risk.
- Lower cost option: cheaper to retain existing employees.
Ways to improve staff retention:
This begins with your hiring process, ensure you are recruiting the right people for your business, people who are looking to carve a career for themselves. Whilst it is important to find candidates who can make a positive impact on the business quickly, also identify attributes such as attitude, integrity, long-term ambition, loyalty and commitment, as well as the necessary skills, experience and academic qualifications.
Pay them right – It is crucial to the pay market rate, with bonuses and benefits too. The market is becoming incredibly candidate short and when employees feel under-paid they feel undervalued. They will therefore be more likely to explore external options, like our salary comparison tool, to see what money they could be earning.
Flexible working – As people progress through their lives; priorities can shift somewhat. Whilst there can be a hesitation to offer flexible working hours with the affect that may have on productivity; you can often get more out of your employees by giving them the flexibility, in that they will probably work “smarter” in the hours that they do work. The value of a work-life balance cannot be underestimated, no matter what the working practices are. Numerous studies have shown that it is not just remuneration that employees consider when job hunting.
Training and culture – A famous quote from Richard Branson sums up the right attitude to have: “Train people well enough so they can leave, treat them well enough so they don't want to”. Branson, R: "Look after your staff" virgin.com 2016. Web. https://www.virgin.com/richard-branson/look-after-your-staff. It is important to provide the training and development employees need to upskill, and to progress them, you are increasing their value to the external market, therefore increasing the number of opportunities they would have open to them. Treating them well is what will keep them loyal to your company and avoid interviewing elsewhere.
Plenty of praise and recognition – As discussed earlier, remuneration is an important element of keeping employees engaged; employers may pay well but many fail to recognise the extra mile their staff members go. Just a simple “thank you” or “well done” is all that is needed to make employees who are surpassing expectations feel valued, and prevent them becoming disgruntled.
- Progression plan – regular appraisals to establish long-term ambitions of each individual and specifying goals in the short-term achieve the next milestone.
By looking after your employees consistently throughout their career – with regards to their training, remuneration, progression and the culture in which they work in; you should be able to strike the right balance between losing too many people and holding onto the right ones.
T: +44 161 829 0404