How to Improve Your Company's Retention Rates

With unemployment rates under 5%, talented workers have increasing bargaining power, and finding ways to attract and retain them is top of mind for founders and CEOs. A new report from Deloitte University Press indicates there's a lot of room for improvement: only 54% of employees recommend their company as a good place to work, and two-thirds of employees thought they could find a better job in less than 60 days if they tried. In response, companies are deploying analytics and strategies to try to predict and increase retention. Deloitte says classic employee engagement surveys, like those provided by Gallup, need to be retired—they're not wrong, per se, but they don’t prescribe actionable results. Meanwhile, tech companies are offering exorbitant benefits in an attempt to get employees to stick around, they can't tell if more benefits actually make a difference.

Deloitte has identified three key issues to improve employee engagement:

  1. Leaders need to change their idea of “engagement.”
  2. Companies need tools and methods to capture employee feedback in real-time.
  3. Employee engagement should be a core business strategy.

We've summarized the five elements Deloitte recommends to increase employee engagement below, and included examples of companies reinventing the employee experience.

A New Model for Employee Engagement

  1. Make work meaningful. Make sure your people’s jobs are meaningful, and that they have the tools and autonomy to succeed.
    1. Choose the right person for each job. It’s not all about credentials. For instance, the employees who drive the highest level of customer satisfaction at one theater company were those who “liked to have fun” and “love to serve others”.
    2. Assess culture as a part of job fit. Zappos uses its 10 core values to assess people for culture fit in the early stages of the application process, leading to high engagement and low turnover.
    3. Prevent burnout. A well-known retailer sends workers home when work is slow so they’re free to run errands, have lunch with their families, or just relax.
  2. Foster great management. Companies must develop, coach, and help people grow, rather than just focusing on the work itself.
    1. Set goals. Deloitte found that companies that revisit goals quarterly have threefold greater improvement in retention and performance than those that revisit goals yearly. Google, for example, uses an agile goal-setting process called OKR (objectives and key results). Everyone, from CEO down, is asked to create realistic objectives and key results that monitor their progress. This creates alignment because OKRs are public, and the measurement for performance is clear.
    2. Increase coaching. When managers act as coaches, rather than directors, they understand people’s strengths, which builds employees up for success. It's just as important to give leaders direction and mentorship.
    3. Re-engineer the performance appraisal. Only 8% of Deloitte’s surveyed companies think the process is worth the time. A new process should involve more continuous feedback, place less weight on rating, and encourage hyperperformers.
  3. Establish a flexible, humane, inclusive workplace. Create a workplace in which people feel their contributions are valued, and they're trusted to work in the best interest of the company.
    1. Provide open workplaces. Allow employees the option to work remotely, or outside the standard 9-5. For example, Zappos allows remote work from local restaurants, and even pays for WiFi.
    2. Deliver continuous, ongoing recognition. High-recognition companies build a culture of recognition through social rewards systems, regular thank-you activities, and a general culture of appreciation. When JetBlue implemented a peer-to-peer recognition system based on company values, employee satisfaction surged by 88%.
    3. Create an inclusive, diverse workforce. Teams that operate in an inclusive culture outperform their peers by 80 percent. To become more inclusive, leaders must overcome their unconscious biases and make every effort to listen, create open forums for discussion, and promote people with varied backgrounds.
  4. Create ample opportunities for growth. Organizations with a strong learning culture have retention rates that are 30-50 percent higher.
    1. Design onboarding and transition management programs. Develop a culture of support and learning, and giving people time to learn.
    2. Support and honor internal mobility. Give people the freedom to try something new and move from a role where they’re highly productive to being a trainee again.
    3. Recognize leaders for developing people. "Making the numbers" isn't enough—retention levels should also be a part of managers' performance ratings.
  5. Establish vision, purpose, and transparency in leadership. Vision is paramount– “mission-driven” companies have 30 percent higher levels of innovation and 40 percent higher levels of retention.
    1. Define your company’s value in terms of all its stakeholders. For example, pharmaceutical companies are redefining themselves as "wellness" companies.
    2. Encourage transparency. Be upfront and willing to have difficult conversations. Whole Foods releases everyone’s salary and bonuses from the previous year. If their employees have concerns about their compensation, they are encouraged to make an appointment with HR.
    3. Focus on inspiration. Senior leaders in particular must reinforce the purpose of the company; this can make or break employees’ sense of purpose in the organization.

Capture Real-time Feedback

Creating an workplace dedicated to employee engagement is obviously a long-term goal, but there are two simple steps that can help you take the first steps towards improving employee retention:

  1. Get HR and leadership onboard with these crucial factors. While we've included some examples and statistics to demonstrate the importance of employee engagement, you may need to create a story to help leaders see the bigger picture.
  2. Familiarize yourself with employee sentiment. Forego the annual employee survey for new tools–Culture Amp, Blackbook HR, TINYhr, and BetterCompany–to actively measure employee feedback and sentiment. These tools will be the “heartbeat monitor” for your business.
  3. Address one issue, and go from there. Try out Culture Cards exercise to identify a pressing issue and work through possible solutions with your team.

Takeaway: In order to improve employee retention, you must put employee engagement at the center of everything you do. Get HR and leadership on board to reprioritize employee happiness to the top of the company’s business goals.

Source

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