For several months, America's unemployment rate has hovered near 4 percent. That's considered full employment, which is good news for job seekers.
For employers, however, it's a different story. If you're an employer, you don't just face stiffer competition for new hires, but competitors also may be attempting to recruit your current employees away from your business.
The challenge is to retain your best workers when competitors are hiring. Employee poaching is an unfortunate but undeniable fact of the hyper-competitive business landscape, where rising industry players are told that the paycheck is always greener on the other side.
“It's definitely a buyer's market for employment, and people have so many choices about where to work," said Kathryn Keene, head of talent acquisition at City National Bank. “Open positions actually cost the business financially through the recruiting process and in productivity by causing disruption. While there sometimes are good reasons to hire new people, it's always more efficient and cost-effective to be able to keep the staff you already have."
Employee Retention Strategies that All Business Can Adopt
So how do you keep your employees happy? Contrary to popular opinion, it's not always about money or perks. A 2017 study by BCG, a Boston-based management consulting firm, revealed that the No.1 source of female employee retention was providing adequate feedback and mentoring.
If you're worried about losing your best and brightest, consider these five strategies to make employees feel valued and boost their loyalty.
Offer Employees a Flexible Work Schedule
“It doesn't cost an employer anything to give somebody a flexible schedule or allow telecommuting, and such flexibility can be a game-changer for an employee,” said Michael Kilroy, HR business partner leader at City National Bank.
If you want to be perceived as worker-friendly, keep an open mind about work-from-home days, connecting via mobile devices and punching the clock outside the 9-to-5 window. This sort of flexibility will make you especially popular with tech-savvy Millennials, who are starting to rewrite the rules of the corporate workspace.
For instance, at City National Bank, employees who are stuck in traffic or can't get into the main office can drop into branch locations and put in a day's work (or a few hours). “That ability for unplanned flexibility means a lot to our employees," Keene said.
Promote from Within Your Company
Companies suffer when they don't give their employees new opportunities. Promoting from within and giving hard-working and loyal employees opportunities to rise through the ranks is a great way to make workers feel that they are being appreciated and rewarded.
Take Time to Understand Employees' Preferences
While offering promotions may seem like the best way to honor loyal employees, it doesn't work for everyone. “People want to keep doing the work they like to do," Keene said. “Sometimes people want a promotion for the recognition, but then they're no longer doing what they enjoy."
Keene recommends checking in with employees, especially after they've settled into a new position, to find out whether the work they're doing is satisfying. “Some people may prefer to go back to their old jobs, even for less pay, if they are happier there," she said. “You have to be willing to approach those conversations and really listen to keep people happy."
Provide Opportunities for Personal and Professional Growth
Even if employees love their jobs, most want to continue growing individually and professionally, whether that means adding new skills or getting healthier. Show your commitment to helping them become the people they want to be by offering opportunities for continuous learning or health and wellness programs. For instance, you might offer tuition reimbursement or a subscription to an online learning platform.
City National Bank encourages employees to create special interest groups to learn and grow with others of similar interest. “We have active multicultural groups and groups for a number of special interests," Keene said. “While these groups are not run by HR, we support employees who want to take the lead and start their own groups, which fosters a culture that people want to be a part of."
Encourage Teamwork and Collaboration
The happiest and most efficient workplaces encourage and value input from all their employees. Consider involving workers in decision-making, and look for ways to build stronger cohesion among your team. For instance, does your workplace offer areas for serendipitous conversations and brainstorming sessions, or is everyone sequestered in his or her own office with the door closed? Moving toward a more open floor plan, or incorporating gathering spaces into the layout, “will change company culture quite a bit," Keene said.
Despite your best efforts, employee turnover is inevitable and will happen for one reason or another. By creating a culture that employees enjoy, it will help recruit the next talented individual to join your team.
Other ways to improve retention include providing employees with an effective compensation plan and creating a strategic plan so employees understand how their work contributes to a larger vision.