It can be tough to find the right people to work for your company. And once you’ve found those talented employees, retaining them can be even more difficult. According to the Society for Human Resource Management, it costs a company six to nine months of an employee’s salary to replace them. What makes that statistic even scarier is the current state of the American workforce. By the end of March of this year, 11.5 million jobs were available, and 4.5 million workers quit their jobs that month. Companies across the US are desperate to find top talent—and this year has proven to be especially challenging.
But if hiring new employees is so expensive, wouldn’t it make sense for companies to invest more in the resources they already have? The answer seems simple; however, not many leaders are aware of what it takes to fully make this investment.
If you’ve been putting a lot of energy into recruiting but are seeing little return in your retention, you need to look at your business and make sure you are directing your attention to the following areas.
You might think that it’s more expensive to raise a current employee’s salary than it is to hire a new employee and pay them less. But that couldn’t be further from the truth. Between 2020 and 2021, American companies spent over $92 billion on training new employees. It is far more expensive to recruit and train someone new than it is to ensure your existing staff is well paid for the work they are doing.
People want to be compensated fairly, but this doesn’t mean every employee is looking for a 10 percent raise every year. Show your employees how they can contribute to the company’s success, and give them a clear path to do so. Feeling appreciated and valued, they’ll be well worth the money you invest in them, and your company will hit its goals more quickly.
We’ve implemented and shared new career trajectories for our employees at ReminderMedia and have seen great success in giving our staff a clear pathway to reaching their objectives, both monetarily and professionally. When you’re able to combine the two pieces and present a road map for getting there, your employees will feel much more satisfied and appreciated.
When it comes to managing your employees, you should consider the whole person. There is a concerning statistic that 76 percent of people claim to have a toxic boss. You need to show your people who you are and encourage them to let you into their lives too. Oftentimes we think of the individuals we work with only within the confines of their work persona, but there is so much more to people than that.
Take the time to really engage with your employees in one-on-one meetings. Find out about their families, likes, dislikes, hobbies, and the sports teams they love. It can be helpful to keep track of this information in your meeting notes, especially if you manage a large group of people. All of this is essential to building trust and a positive company culture. The same principles apply to business—if you’re only thinking of the transaction, you’re liable to lose that person when another offer comes along.
Are you giving people pathways to advance in your company or within their chosen fields? And, more importantly, do your employees feel empowered in their roles? Millennial employees are particularly inclined to job hop for career advancement—75 percent in fact—and 50 percent of employees are considering a career change, according to recent studies.
One of the best ways to drive engagement and employee loyalty is by setting your people up with a vision for achieving their goals and aligning their goals with those of the organization. For example, if you have a top team member who is interested in learning more about project management and your company needs a leader in that area, invest in their continued education. This investment shows them not only how valuable they are to you but also sets your organization up for greater success by empowering your leadership.
Helping your employees advance doesn’t have to be as big an investment as paying for their education. You could take simpler actions, such as reading a book with them on a core principle or value they are working on improving or giving them tangible and trackable goals to help them advance to the next level.
Although it’s the last on this list, a lack of culture or a negative environment is one of the biggest reasons people leave their job—over 30 percent of employees reportedly think about leaving a company due to its culture. If you aren’t fostering a positive setting where people push one another to succeed, your employees will have no other choice but to look for that atmosphere elsewhere.
Even though it may be challenging to maintain a culture in this new work-from-home era, it is possible to do so and to do it well. At ReminderMedia, we have empowered our managers and team leads to take initiative in setting up team-building events and other group activities to nurture relationships from afar. We also host biweekly all-staff meetings to update employees on company goals, procedural changes, and accomplishments. These are small efforts we can take as a leadership team to make a big difference in the engagement and energy of our employees every day.
Write down one way you can commit to improving your employees’ experience in these four areas: compensation, personal development, career development, and culture.