Creating an effective employee retention program involves several key elements. Find out what these and how you can use them to your benefit
Think about your three top-performing employees. Now, imagine that today is their last day as they have found better opportunities elsewhere. What would it take to replace them? How would the departures affect your remaining staff? Could you find equally talented replacements? Scary thoughts, aren’t they?
The good news is, more often than not, employee turnover can be prevented; all you need is a strong employee retention program.
In this article, Benefits and Pensions Monitor lists the top employee retention programs every organization must consider. We will also crunch the numbers to find out why these programs are successful.
If you feel like your business is at risk of losing top talent or your company is becoming just a stepping-stone rather than a destination, this piece can prove useful. Read on and get practical ideas on how your organization can retain existing employees in this guide.
What is employee retention and why is it important?
Employee retention refers to your company’s ability to keep your employees. This includes programs and strategies that you put in place to retain top talent and reduce the risk of employee turnover.
A recent study estimates the cost of replacing an existing employee at about three to four times their salary. For context, a staff member earning $50,000 in salaries costs between $150,000 and $200,000 to replace. This doesn’t even account for losses in time, productivity, and knowledge, and the impact on your company’s culture.
This is why employee retention programs are among the biggest keys to a successful business. When implemented correctly, these programs help a lot in building an engaged and productive workforce. They also play an important role in fostering a culture of trust, loyalty, and commitment.
Top 10 employee retention programs every company should have
Creating an effective employee retention program involves several key elements. These include your organization’s compensation strategies, work environment, manager-employee relationships, career development pathways, and turnover rates. Building a program tailored to your company’s needs can significantly boost job satisfaction, allowing you to retain your top employees.
Here are some of the best employee retention programs and strategies your company can consider. The BPM research team also compiled numbers showing why these programs can be effective in preventing voluntary turnover.
1. Onboarding and orientation
It all starts on the employee’s first day. During onboarding, a new hire is integrated into your company and its culture. This process is more than just a checklist of tasks. It is designed to make employees feel welcome and provide them with the knowledge and resources they need to succeed in their roles.
A good onboarding experience often sets the tone for a successful long-term employer-employee relationship. This research from Glassdoor shows that a strong onboarding process can improve employee retention by 82% and productivity by 70%. It adds that companies with weak onboarding programs lose the confidence of their new hires and are more likely to see them go in their first year.
That’s why when implementing an onboarding program, it is essential that you make sure that no new hire is left behind. This is especially important as the emergence of remote work has added unique challenges to the process.
2. Compensation and benefits
A comprehensive compensation and benefits package is one of the strongest drivers of employee satisfaction. This, in turn, helps boost your company’s retention rate. Competitive wages, coupled with meaningful benefits, play a key role in preventing your workers from leaving your organization.
A recent survey by ADP has found that 88% of Canadian employees were considering switching jobs in the next six months, with compensation as the biggest reason for doing so. If you’re in the process of creating an employee retention program, it’s important to revisit your compensation and benefits structure to ensure that it remains competitive.
Check out this guide if you want to learn more about the different government-mandated employee benefits in Canada.
3. Positive work culture
A positive work environment can have a lasting impact on employees at all levels. A company culture built on trust, fairness, and inclusivity has been proven to not just boost productivity, but also attract high-caliber employees.
To retain top talent, your organization’s leaders must actively strive to establish genuine connections with their teams. Whether in an office or remote setting, there are several strategies that your leaders can take to foster a supportive work culture. These can include opening lines of communication, acknowledging team members’ contributions, and supporting their well-being.
It's also important to make sure that your workplace is welcoming to employees from diverse cultures and backgrounds. A work culture that cultivates respect for employees of all races, genders, and sexual orientations attracts and retains a wider and more diverse pool of talent.
4. Remote and flexible work opportunities
Flexibility is another key element of a successful employee retention program. Offering your staff flexible work opportunities shows your company’s commitment to helping them achieve work-life balance.
Remote and hybrid work arrangements have become more popular in the wake of the COVID-19 pandemic. While many companies have reopened their offices, many Canadian workers still prefer to work remotely, at least part-time.
Without this option, some employees may look for flexible work opportunities elsewhere, according to a survey conducted by Robert Half. A recent poll by the HR consulting firm has found that 53% of employees working from home will find a new job if forced to return to the office full-time.
5. Employee engagement
Several studies have already established the link between an engaged workforce and employee retention. An engaged employee is more likely to stay with your company, work harder, and motivate others to do the same.
This research from Harvard Business Review reveals that an astounding 92% of business executives believe that engaged workers perform better. Because of this, they help boost their team’s success and help their organizations achieve better outcomes.
So, how do you incorporate employee engagement strategies in your employee retention program? Here are some options:
- give your employees a voice in major decisions
- open lines of communication
- improve efficiency in the workplace
- encourage employees to build relationships outside the professional setting
- focus on employee well-being
- recognize employees’ efforts and achievements
6. Rewards and recognition
Not only do employees who feel appreciated stay longer, they also work harder. Building a culture of recognition requires consistent and specific acknowledgement. A 2020 survey by the Brandon Hall Group revealed that companies that recognize staff members multiple times a month are 41% more likely to retain employees. More than a third or 34% of these organizations are also more likely to see increased engagement.
While the respondents are mostly US-based companies, the poll results still highlight the importance of appropriately recognizing and rewarding hard-working staff. To make this an effective part of your employee retention program, make sure to focus both on social recognition and monetary rewards. A rewards and recognition platform that allows workers to earn credits for redeeming rewards that mean something to them can be a good start.
Get more ideas in this guide to the top employee recognition programs in Canada.
7. Professional development
A strong employee retention program provides ample opportunities for career development. Workers are more likely to stay with your company if they see themselves thriving there professionally. This study shows that employees who get professional development opportunities are 15% more engaged and have 34% higher retention rates than those who don’t.
Investing in training and upskilling your workers also benefits your succession planning as it enables you to develop future leaders. It can also help your company boost productivity, improve employee confidence, and attract top talent.
8. Leadership training
Managers play a crucial role in employee retention. Bad managers drive top-performing employees out the door, while good managers allow staff to thrive and grow in their careers. That’s why it’s not surprising when a recent Udemy report found that almost half of employees have left their jobs because of a bad manager.
To avoid this scenario, it’s best to provide future managers with the proper leadership training before promoting them. This ensures that they are equipped with the skills and knowledge to guide members of their teams and make sound decisions during difficult situations.
9. Feedback and performance reviews
Performance reviews are another important aspect of an employee retention program. These meetings provide a venue for managers and team members to discuss assignments, achievements, and challenges. They can also talk about career development goals and set plans on how to achieve them.
Managers, however, must be trained in handling performance reviews as the type of feedback they provide can influence an employee’s decision to stay or leave the company. A poll conducted by Textio has revealed that 40% of employees who received low-quality feedback were planning to leave. Seventeen percent of respondents who received insufficient feedback, meanwhile, were planning to search for a new job.
10. Wellness programs
Keeping workers fit – be it physically, mentally, or financially – is an integral part of an effective employee retention program. Wellness offerings have become more popular in the wake of the COVID-19 pandemic as companies find ways to support employee well-being.
With burnout becoming a prevalent issue among Canadian employees, many employers have encouraged workers to take extended time off. Some offer programs that promote a healthy lifestyle.
A study conducted by researchers from Brock University has found that 67% of employees who work for an organization offering wellness programs like their jobs and are more likely to stay. They are also “extremely or very likely” to recommend their employer to others.
Some examples of an effective wellness offering include stress management programs, retirement planning services, and reimbursements for fitness classes. You can check out the best wellness programs for a healthy workplace in this guide.
Why do employees leave?
Part of creating an effective employee retention program is understanding why workers leave. Workers switch jobs for a variety of reasons, including:
Work-life imbalance
Excessive workloads leading to long hours and lack of flexibility in work styles and location can drive employees to seek better opportunities elsewhere. As workers place more value on personal well-being than job loyalty, companies that fail to provide flexible work arrangements may see higher turnover rates.
Workplace conflicts
Issues with managers, co-workers, or organizational leadership can create a toxic work environment that can push an employee to leave. Such conflicts can also have a ripple effect on company culture that can cause other workers to contemplate their future in the organization.
Lack of career growth
Professional development is a key motivating factor in an employee’s decision to stay with a company. Workers who don’t see career growth in your organization will often leave for businesses that offer better mobility.
Incompatibility
Incompatibilities with the role and company culture can be traced back to poor hiring processes and decisions. An employee who is a bad fit professionally and culturally often does not last long in an organization.
Financial reasons
Better pay and incentives elsewhere can lure away your top-performing employees. To keep staff members from leaving, as well as attract top talent, make sure that your company is offering competitive compensation and benefits.
Personal reasons
Sometimes employees leave because of factors that have nothing to do with your organization. These can include relocating for a spouse, health issues, or changes in their family’s circumstances. While these scenarios are often hard to predict, they can still disrupt workplace dynamics. Having supportive programs to accommodate life changes can help soften the impact of these situations.
How to create an employee retention program that suits your needs
Employee retention programs come in various forms, that’s why there’s no one-size-fits-all approach to creating a strategy that suits all businesses. An effective program should align with your company’s values and culture. It must also support both your employees’ professional and personal needs.
When creating an employee retention program, make sure to get your workers involved. You can ask for feedback on what motivates them, what makes them stay, and what can make them leave.
If you’re looking for an organization to model your retention program from, you can check out our list of the Best Companies to Work for in the Benefits, Pension, and Institutional Investment Space. Find out how these businesses established a great workplace culture in this special report.
Which of these employee retention programs suits your company? Let us know in the comments.
