What makes employees stay with a company? It’s a question that has become even more pressing since the so-called Great Resignation. With the lasting impact of the pandemic, companies are losing employees at an alarming rate. We delve into what drives employee loyalty in today’s organisations.
Driving company loyalty has never been harder
There has never been a good time to lose valued employees. Companies have always been exploring employee retention strategies in the hope that they don’t lose a top performer to a competitor.
However, the landscape today is totally different. As a result, the need to understand what makes employees happy, and therefore the reasons why employees stay, is greater than ever.
The fallout of the Great Resignation rumbles on
You couldn’t have avoided the countless headlines referring to the so-called Great Resignation. For the last year, or perhaps more, we’ve been told that employees are leaving jobs in their droves.
This mass exodus is leaving companies struggling to operate with reduced staff. At the same time, they’re desperately trying to discover what makes employees satisfied at work, and more likely to stay there.
Employee burnout is a dangerous new edge to company turnover
The Great Resignation shows no sign of stopping. Recent figures suggest that as many as 85% of businesses have been affected. A third of these reports that the impact has been negative with 31% stating that reduced staffing is leading to employee burnout.
With these kinds of figures, it really never has been more important to understand what makes employees stay with a company. As you keep reading, we have some great employee retention tips to share that can help you to improve retention rates.
What are the benefits of reducing employee turnover?
When exploring the various ways of managing employee retention, it’s worth bearing in mind the end game benefits. Of course, change will be focusing on what makes employees happy but this needs to bring benefits to the business too.
Let’s dive into the three key benefits that you can expect by improving retention rates at your organisation:
1. Loyal employees means reduced recruitment costs
There’s no escaping the fact that recruitment is an expensive process. Taking on a new employee brings a host of costs well beyond the salary. As well as training costs there are the expenses relating to advertising the position and maybe even the use of a recruitment agency.
One study suggests that, by taking on an employee with an annual salary of around £27,000, you are more likely to spend close to £50,000 in the first year.
2. Employees who stay contribute to higher levels of productivity
When you understand what makes employees stay with a company, you benefit from an increase in productivity.
For one, you have a workforce that’s happy and satisfied with their jobs. Secondly, you’re not having to take time out of someone’s schedule to train and onboard a new employee. This is a great time-saver when existing employees may already been overrun with work.
3. Lower turnover generates a better ROI
The bottom line is that, when you reduce employee turnover, you improve your overall business’ return on investment (ROI). A stable workforce typically works more effectively, helping to keep costs down. All of this leads to an increased ROI.
This article shows you how you can calculate the ROI of improving employee retention. The figures speak for themselves. Although it uses US dollars in the example, it’s still impressive.
What makes employees stay with a company?
While the benefits of being able to improve retention rates are clear, how do you actually go about driving employee loyalty? Here are our top ten tips for increasing employee retention:
1. Salaries that aren’t competitive can drive employees away
Finding a company that offers a better salary, for doing the same work, is a major driving force when it comes to employees leaving. Can you blame someone for moving to a competitor, doing exactly the same job, but being paid more? Be sure that the salary you offer is competitive.
2. Mentorship opportunities keep employees engaged
Admittedly, not everyone is looking for progression and to move up the ladder. But for those who are, you need to offer the right support.
Offering employees a mentor can signal that you’re taking their career aspirations seriously by supporting their personal and professional development.
3. Keep roles challenging so employees don’t feel they’re stagnating
When roles become easy, mundane, and repetitive, they become boring. According to this article, boredom is a job killer and a bored worker is an unhappy one.
Give employees an opportunity to feedback about their role and any concerns they may have. Picking up on boredom early can be a game-changer for keeping that employee in your organisation.
4. Promote employees who excel
If you have an employee who’s performing well in their role, it may be time to consider them for a promotion. Employees crave recognition because this helps them understand that their work is valued.
Giving zero feedback to employees can be discouraging for them because they don’t know where they stand. Instead, consider your approach to ensure managers give regular feedback. This can help keep an employee motivated in their role and encourage them to stay.
5. Use inclusive ways of working
Your workplace needs to be inclusive if you want to keep employees happy. This means acknowledging the differences that everyone has but ensuring that every employee feels valued and accepted for who they are.
Employees who feel like they don’t fit in can begin to feel isolated, and their attention could be drawn to the endless list of vacancies on LinkedIn. Creating a sense of belonging is vital to combating this.
6. Show your employees that they’re appreciated
Yes, the salary that you’re paying your employees matters, but it isn’t the be-all and end-all. Your employees want to feel appreciated and you can demonstrate this in other ways.
HR teams at the most successful organisations are constantly reviewing and refreshing their benefits packages for employees. The likes of Perkbox and Ben are growing in popularity because they allow employees to choose their own benefits.
7. Value your employees as people, not just units of work
While you need your employees to work effectively and productively, it’s important to remember that they’re people and not robots! Take time to get to know your employees. Show that you care about their personal lives as well as what they’re doing during their working hours.
8. Give them a mission to strive for
If you look at what makes employees happy, having a purpose at work often comes high up. A lack of purpose can leave employees languishing and make them more likely to look elsewhere.
Setting targets that are challenging, yet achievable, can be a great way to motivate and engage employees in your company’s mission.
9. Empower employees with the tools and resources they want
If you want your employees to perform, a huge frustration for them is not having the tools and resources that they need. Take steps to understand what employees need to achieve their outcomes and do your utmost to make these available.
10. Trust – the greatest gift you can give your employees
It’s important that managers demonstrate their trust in their employees. Trust is incredibly important to individuals, and without it, the organisation’s growth can be threatened.
Employees who trust their employers and know their employer trusts them are more likely to offer ideas and pitch in when things get serious. It also drives their engagement levels which are essential when it comes to employee retention.
Focusing on financial wellbeing gives your organisation an edge
Money worries can have a huge impact on the happiness of your employees when they’re at work. Financial stress isn’t conducive to productivity, and now employers are taking this seriously. In today’s challenging economic times, financial wellness is a must-have employee benefit.
At Openwage, employee wellbeing is at the heart of our earned wage access solution. We empower employees to access up to 50% of their gross earned salary whenever they choose. It’s free for employers and offers employees a safer, more cost-effective alternative to predatory payday loans.
Are your employees craving flexible pay?
Offering employees on-demand pay is typically highly valued as an employee benefit. That’s because employees can use it if they need it, but there’s no obligation or cost if they don’t.
Including on-demand pay in your benefits package is a great addition to efforts that focus on mental and physical wellbeing.
Financial wellbeing is often neglected by organisations when it comes to their benefits. That’s good news for employers who proactively include benefits to promote financial wellness because it offers them the chance to get ahead of competitors.
If you want to know more about how Openwage could benefit your workforce and your organisation, head over to our Employers page. Alternatively, you can get in touch with us.