The job market is tighter than ever. Unemployment is below 4%, and for technical roles it's close to zero. Recruiters are calling your employees at their desks and offering them opportunities to leave. That means disruptions to critical projects and added expense backfilling those team members. You need an employee retention plan to keep your competitive edge. Here are some tips to keep those employees from telling recruiters "yes."
1. Evaluate the Market and Make Sure You Pay Competitively
This is the simplest and most effective way to boost retention. Many employers act like it's 2008 instead of 2019. During the recession, companies got comfortable paying rock-bottom prices for top-shelf talent. The thinking was that companies could save money on hiring and worry about retention later. The problem is that many companies still think that a 2% cost-of-living adjustment and a small bonus are enough to keep top performers. In this tight job market, your A-players are fielding recruiter calls and wondering why they should still work for recession wages.
Companies need to reevaluate the market and make sure they are paying competitively for critical talent. That means looking at key competitors as well as adjacent industries. You might find that the average salary is higher than you think. For example, if you're an entertainment company hiring software engineers, then you're also competing with Silicon Valley. Either pay the market rate to keep top talent or you'll have to pay the market rate to replace them.
2. Improve Onboarding
Companies invest significant time and resources in the recruiting process. The problem is that there is often little investment in the onboarding process once a candidate is hired. Candidates are still a flight risk before they fully settle into a new role. Failing to introduce them to your company culture and integrate them into the organization is an easy way to lose a new hire. Companies need to make the onboarding process seamless and continue to build enthusiasm for the role. This can be accomplished by assigning new hires a senior mentor or even a peer "buddy" who can get them acclimated. Dissatisfaction with the onboarding process can make employees question their decision to accept an offer. New hires that are already dissatisfied are more likely to make a speedy exit.
3. Develop a Clear Pathway for Career Progression
Employees, especially millennials, are concerned about their growth prospects. It's not enough to hire someone to do a specific job; if you want them to stay, they need to see a future with your company. It's your job to define that future and communicate it with employees. Employees that don't see opportunities for career progression are far more likely to jump ship. Sit down with top talent and chart their growth trajectory at your company. Determine what the next few stages of growth would be and how long it should take for the next promotion. Lay out in detail what key accomplishments have to be reached before a promotion is warranted. Clear, consistent expectations for career progression show your employees they have a future with your firm.
4. Invest in Your Employees
Employees who develop new skills can add far more value to your organization. During the recession, companies cut back on learning and development budgets, seeing it as an unnecessary expense. That was shortsighted for a few reasons. First, it's a necessary expense. If your employees aren't growing then you aren't harnessing their full potential. Second, the ability to grow and take on new responsibilities is a key reason why someone stays with a company. Studies show that a lack of upward mobility is a significant factor behind changing employers.
You need to build the career development programs to identify your future managers and leaders. That could be in-house training, outsourced training, or simply a budget for employees to take night classes. Don't think of this as overhead -- this is an investment in the future of your company. It's far cheaper to train an internal leader than make an external hire.
5. Conduct Monthly Reviews
The annual review needs to be buried and forgotten. It might have made sense at one point, but it doesn't now that the average millennial finds a new job every three years. Managers are gradually adopting more frequent quarterly or even monthly reviews to get a finger on the pulse of their workforce. More frequent check-ins with employees makes it easier to spot issues and address workplace concerns. If an employee isn't happy, do you want to wait a year to learn why?
Monthly check-ins make it much easier to gauge morale and spot top talent that might try to leave. You can use these opportunities to flesh out what the real concerns are and try to address them. If it's compensation, talk to Finance. If it's a lack of growth or upward mobility, start making a plan with HR. Monthly reviews can help you develop strong relationships with employees and help you retain your top talent.
6. Get Rid of Toxic Bosses
Getting rid of bad bosses can be difficult, but it's essential for employee retention. One of the most common reasons employees leave a job isn't money; it's a bad boss. There's plenty of ways to describe a bad boss, but you know them when you see them. They're disengaged and they can't manage a team, or worse -- they make their subordinates miserable. Even if you haven't spotted your bad bosses, your talent already has. Boosting employee retention means addressing these bad leaders before they drive away your employees.
The use of 360 surveys or other data can help to identify leaders that are particularly disruptive to their divisions. Work with HR to try to retrain these leaders or reduce their number of direct reports. You may not be able to make these leaders less toxic but you can limit the number of employees they impact. The challenge is that toxic leaders might be rainmakers or employees with specialized skills. They might add value, but take into account the added cost of hiring and training new employees. You may find you don't need those toxic leaders as much as you thought.
7. Recognize Top Performers
Show top performers the love. Your A-players are the ones that your competitors are trying to poach. Companies need to think hard about how they recognize and reward top performers. A pat on the back during that annual review is not going to cut it. You need to develop employee incentive programs and employee recognition awards to highlight exceptional performance. Those programs must be tied to clear, measurable performance goals. For example, sales professionals might have sales incentives programs that recognize those that exceed their targets. Other options include total rewards programs that might offer cash bonuses or office perks. Your employee incentive ideas can be as creative and tailored as necessary to recognize top talent. Companies that reward exceptional team members are far more likely to keep that talent from walking out the door.
8. Keep Pace With Competitors
Recruiters are calling your top talent and offering all kinds of perks and benefits -- shouldn't you? If your competitors are investing in their in-office experience then you should be doing the same. This might mean discounted meals, on-site laundry, or entertainment spaces. If you compete with tech companies, this is especially important. These upgrades can cost money, but they give your employees a reason to work late and ignore recruiter calls.
You don't want employees who only work for you because of the perks, but perks make your overall compensation package more enticing. Unfortunately, you may find yourself in an arms race with other companies to provide attractive perks and benefits. You might not want to play along, but your employees expect you to. Keep an eye on what your competitors are offering and make sure you're keeping pace.
Employee retention needs to be a priority, no matter how strong your company brand. Shortages of key talent, especially those with technical skills, make your employees more attractive to competitors. Recruiters are already circling the nest and looking to cherry-pick your top talent. You need to give those employees a reason to stay and remain committed to your company's success.
Paying competitive salaries and offering quality perks are table stakes. You need to invest in your employees and show them a path to upward mobility. Creating employee recognition programs to reward top performers helps you keep talent at their desks and recruiters at bay. You need to give your employees a reason to stay before you have to start poaching someone else's talent.