Benefits and Salary are Not Enough: Trends in Employee Retention
According to Fast Company, many working individuals will have more than 10 jobs in their lifetime, with a shorter job tenure than was customary in previous generations. Such statistics indicate the challenge businesses face in their efforts to retain qualified, hard-working employees.
Employee turnover costs for business can be measured in many ways, including:
- The expense of recruiting, hiring and training replacements;
- The negative effects on a company’s culture;
- Loss of valuable knowledge about the company's internal operations; and
- The damaging effects on employee morale.
It's impossible to retain every employee who chooses to move on (for either personal or professional reasons), but there are actions businesses can take which may mitigate turnover and create a desirable workplace.
A primary determining factor for many employees is the company's benefits package. When combined with salary and variable pay, a superior benefits package can help recruit and retain high-quality employees that your business values most.
What constitutes a "great" benefits package? These days, such key benefits may include a combination of the following: health insurance, dental and vision coverage, paid time off, a retirement plan, flexible spending account, and a health savings account. This can serve as a foundation for your own customized benefits package, but it's always a good idea to survey benefits offered by competitors in your industry. After all, the employees they attract could likely be the same ones who would prove most valuable to your company.
How can you determine what a competitive benefits package in your industry might look like? Try contacting the local Chamber of Commerce or seeing if a local HR association has conducted a survey on this subject. Insurance and tax professionals in your network are another source for information on comparable industry benefits. And, of course, you can ask your employees what they would most value in a benefits package.
Many businesses supplement their benefits package with other proven employee-retention strategies. Knowing that the best workers often place a high premium on career development, such companies offer various opportunities for employees to continue their education and training, including tuition reimbursement—either a percentage of the cost for college courses or the full amount—so employees can expand the range of skills needed to improve their professional skillsets.
Many businesses also offer wellness initiatives that demonstrate their concern for workers' health. Smoking-cessation programs, on-site workouts, "fun" competitive walking and running events, and healthy vending machine snacks have all proven very popular with employees.
Productive employees crave recognition for the work they do. While it's often desirable to demonstrate recognition through a raise in salary or a holiday bonus, many employees also respond favorably to gestures that extend beyond financial rewards. Such programs and initiatives may include:
- Responsibility-based recognition — Invite key employees to head a new project or lead a committee exploring changes in business operations.
- Monthly or annual high-performance awards — Recognize an employee for his or her contributions at a staff meeting or other departmental gathering.
- Peer recognition programs — Encourage fellow employees to nominate a colleague for outstanding dedication and service.
Professional goals are another intangible. When people are given an honest view of the company's big picture—its current strategies and long-range vision—they may feel greater motivation to do work that makes a difference to the business. It's a powerful method for tying individuals to an organization, particularly when meeting their individual goals can be directly linked to the company's future success.
The free flow of communications can also influence an employee's decision to stay with a business. Employees value feedback centered on their individual performance as well as opportunities to share knowledge with the executive team. Employees appreciate having a say (within reasonable guidelines) about the company's future direction. The more a business shares with employees, the stronger the bond between them.
Some employees will come and go, regardless of the benefits offered to them. But with the right combination of tangible and intangible benefits, many businesses can retain the right ones. Those same benefits may also prove invaluable as part of an aggressive recruiting strategy. Nothing demonstrates an employer's desirability like a workforce of satisfied and hard-working employees.