Best Practices for Employee Retention

Employee turnover is a natural part of business in any industry, but excessive turnover decreases the overall efficiency of a company and hurts the bottom line. Big corporations understand the effects of employee turnover and use many different strategies to tackle the issue and best practices for retention. However, a Watson Wyatt survey shows that more than half of small and mid-size companies have no employee retention strategy in place.

As the current job market gains momentum, especially for construction and real estate companies, you may find that employee retention, especially of your top performers, has become increasingly difficult. Losing your best people damages your productivity, disrupts current and potential leadership, reduces team morale and also helps your competitors. Matching a competitor's job offer in order to retain your top performers is not a retention strategy and it only encourages more employees to seek outside job offers. To avoid such a dilemma, the following serve as eight recommendations that should be part of your formal retention strategy:

  1. Track retention using data and exit interview results: Unless you track retention, you can’t improve it. Gathering such data allows you and your employees to know where problems exist in order to pinpoint with more accuracy those that can be efficiently resolved. 
  2. Hire the right personnel: Seek out people who are intrinsically motivated and interested in developing their skills and careers. Also, clearly establish expectations when you hire so that disappointments on both sides can be avoided. It's also important to evaluate candidates for a cultural fit so that potential hires assimilate well into your company culture and more seamlessly blend in with your current teams.
  3. Train first level supervisors/ managers: Employees generally do not quit on the company, but rather they quit on their managers. Managers who communicate well, offer feedback and behave professionally are crucial parts of your best retention strategy. Additionally, encourage managers to conduct “stay interviews” with their employees to support open and honest communication.1 
  4. Offer employees a career path and a career development plan (and work with employees to update this plan annually): This will allow your employees to have a better long-term vision of their evolving role inside the company. It will also allow the company to show its commitment to developing its talent, which benefits both the company and the employee. Succession planning, which is very important to the construction and real estate industry, also ties into employee development. Succession planning without investing in development is an exercise in futility. The best companies spend more time developing candidates than they do creating lists.
  5. Have a recognition program: Recognition programs create a culture to formally and informally reward good behavior. Employees feel a sense of accomplishment and success when their good behaviors are recognized as well as when they are challenged to be better employees.
  6. Look for Stressors: Train your leaders to recognize stressors in your work environment and also help employees in stressful positions.
  7. Customize benefits: This process will take significant time and effort because such a task requires a company to better understand its employees. Different employees want different things, so offering the same benefits package and working conditions to all will inevitably create dissatisfaction, which is a turnover risk. While it may be inconvenient to offer more flexible working hours or a customizable menu of benefits, such practices boost employee satisfaction and loyalty.
  8. Ask for feedback, but only if you commit to act upon the feedback: Employees want to be involved, empowered and feel their work has impact. However, beware of asking for feedback unless your management team is committed to act upon the feedback and provide updates. Otherwise, you will lose the trust of your employees.

The takeaway: If you don't want your best people walking out the door, you'll need to build a proactive retention strategy that meets their individual needs for career development, recognition and work-life integration.

Does your company have a proactive retention strategy?


Author

Rick White, Partner | Assurance | 703.226.0098

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1. Kaye, Beverly and Sharon Jordan-Evans. (2014) Love ‘Em or Lose ‘Em: Getting Good People to Stay. San Francisco, CA: Berrett-Koehler.

 

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