- Publish date
- Mar 30, 2022
All organizations spend significant investments in attracting and hiring the right talent. What many of them don't do is spend the same efforts and investment to ensure employee retention.
Unfortunately, the turmoil and dynamics of the labor market and the global pandemic have led to the Great Resignation era, filling every company with dread.
Most tech companies struggle with a high employee turnover for various reasons, one being leadership strategy. According to an Isle Recruitment retention report, 80% of employees agree that their company managers significantly affect their overall job satisfaction and happiness. When training, recruitment expense, and lost talent are considered, employees' high turnover rate can lead to crippling operational and financial consequences on a business. So, why not change leadership strategies and retain your employees?
At the end of the day, employees are the lifeblood of any business operation.
How to Calculate Your Employee Retention Rate
Before we jump straight to the best leadership strategies for employee retention, let's first see the rate at which your company is losing or retaining employees.
Calculating the retention rate of your employees is relatively straightforward. Divide the total number of employees remaining after a set period by the number of employees your company started with during the same period. Then, multiply the number by 100.
The retention rate calculation formula can be summarized as follows:
(Remaining employee headcount through a set period ÷ Beginning employee headcount through the same set period) x100
If you started the past quarter with 40 employees and finished the quarter with 35 employees. Your employees' retention rate would be (35/40)x100, or 88%.
A lower retention rate means that your business is spending more money - .5 to 2x an annual salary- and time hiring new talent than ensuring the existing ones stay and grow.
Below are some key leadership strategies to help improve your employee retention rate:
1. Start by Making Onboarding Process a Pleasure
Most companies don't realize how vital the first interaction between the company and the new staff is. Many, therefore, lack proper plans for employee onboarding. A study shows that employees who experience satisfying, positive onboarding have a 69% higher chance of staying at the company for about three years.
Well-structured onboarding strategy helps new staff feel valued, confident and welcome. It should not only focus on teaching the employee about the primary role but also about the entire business culture and how their presence will contribute to its growth. The support, motivation and training you provide from the first day, whether virtually or on-site, can determine the employee's possible tenure at your organization.
2. Create a supportive and flexible work environment
Employees like to exist and contribute to a work environment where they are adequately supported. This is another key to achieving high retention rates. Therefore, a leader should strive to build a workplace where employees thrive and perform as best as they can.
Additionally, the pandemic has resulted in a hybrid workplace where flexible working is necessary. A survey by Robert Half shows that most people switch employers if their current company doesn't adopt a flexible work environment.
3. Provide Regular Training
Regular on-the-job training helps employees as well as leaders. Everyone needs to uplift their skills and broaden their potential. Employees will appreciate leaders who offer opportunities to develop their skills since that can allow them to take on additional assignments or responsibilities. The more skills and experience they gain, the better they get at their roles, adding value to your organization.
4. Support Mentorship Programs
Mentorships are a great way to match newer employees with more experienced ones among your teams. Your more seasoned team members can mentor new ones and help them navigate the company structure, understand the culture, policy and priorities, create goals, and accomplish daily roles and responsibilities. When new employees have proper guidance and organizational knowledge, they are more likely to become satisfied and committed to the company's growth.
5. Aim for Clear and Effective Communication
Good workplace communication is essential for employee retention. Leaders should ensure employees understand what they expect from them and be willing to answer questions, listen to ideas and offer solutions to concerns. As a leader, you must promote timely, clear and effective communication for the entire team, including remote and in-office employees. Strive to connect with each individual regularly to understand their workload and other job elements.
6. Schedule Career Growth Plans
Creating a development and growth path for employees is a great way to ensure retention. These plans motivate employees and give them a goal to focus on. Gallup's report proves that lack of growth plans is among the top reasons staff leave for other companies. About94% of staff will stay longer at a company offering employee career growth and development opportunities.
Make it a priority to help employees thrive professionally by identifying areas for growth, such as learning new skills. Allow them to attend conferences, pay for or organize training.
7. Offer Impressive Employee Benefits
Offering employee benefits and perks shows them that you appreciate their contribution to the company's growth, and it can also provide them a sense of security about the job and their lives. Employee benefits such as health insurance or fitness discounts also show that you genuinely care about your staff's wellbeing. Remember to ask for feedback about what they'd like offered as part of direct benefits.
Employees also job-hop for higher-paying workplaces. Therefore, do not risk high turnover by inadequate pay. Retention is always more cost-effective than replacement.
8. Be Receptive to Employee Feedback.
Leaders often find it easy to check in with employees but very difficult to accept or listen to feedback. However, employee feedback through suggestion boxes, pulse surveys, stay interviews, or exit interviews are excellent methods for finding out their pain points and motivations so that you improve and make changes that boost job satisfaction and lessen their chances of jumping ship.
Let Buchanan Tech Help You Retain Your Tech Staff.
As a manager or executive, your leadership strategies significantly impact how soon your staff quits or how long they stay and work for your company. It is, therefore, important to create the best possible experience at the workplace. Nowadays, employees are more likely to stay loyal to a company if they see future possibilities in that company. The best way to demonstrate this is by adopting effective leadership strategies to handle the current hybrid workplace without losing talent. The more your staff enjoy working in your company, the lower your costs, and most job seekers will find your workplace attractive.
Buchanan Tech can help you examine your employee retention rate with a free and efficient retention audit. Contact us for a quick employee retention audit and get a free guide to help you improve your leadership strategies for better retention rates.