7 (Free!) Ways to Improve Employee Retention

Your employees don’t have to work for you. Some may have deluded themselves into thinking they have no other option. One day they will wake up and remember that they don’t actually have to work for you.

If an employee makes $50,000 a year and they quit, a company should expect to spend around $12,500 replacing that employee. For more details on how to calculate and reduce those costs check out Scott Allen’s post on the High Cost of Employee Turnover.

If you run a small business or a start-up, spending a lot of time and resources replacing employees can be an enormous burden. You probably also can’t afford to spend a lot of money on expensive over-the-top benefits to keep them around. With that in mind here are seven tips for keeping your employees happy, productive, and your employees.

Be Flexible

Sh*t happens. Real people have emergencies, sick kids, bad days, et cetera. If you want to avoid those situations, hire robots. If Sally is chronically late, have an honest conversation about her life outside of work and her work schedule. Does she have to get a kid to school on the other side of town? Does she just not function well at 7am? Can you let her come in and leave an hour later every day? As a boss it may seem like you can’t make those types of exceptions for one employee. You can. Especially if it means Sally will be working harder on behalf of your company’s long term goals.

Recognize Passion

Passion is poweful and when harnessed appropriately can be both a money maker and a motivator. If John gets excited every time he gets to work on X type of project, ask him what about that type of work is important to him personally. Think about how he can work on more projects similar to X. Find out if you can transfer his excitement in that area to other areas of his work.

If Adam seems uninspired by his tasks, have an open discussion about what you can do as an employer to change that. Inadequate training, office gossip/bullying, or even uncomfortable temperatures can turn a once-passionate employee into a mindless drone. Don’t let easy-to-remedy issues hold employees back from really loving their work.

Encourage Growth

As a product of the information age, today’s employees have broader interests. Abby in accounting reads regularly about social media. Dylan the IT analyst trades foreign commodity stocks online. Encourage cross-pollination whenever you can. Multi-specialty teams remove boundaries and give employees the opportunity to work in an area of interest without formal training.

Google boosted productivity, retention, and recruiting by enacting their “Innovation Time Off” policy. This policy allows employees to spend up to 20% of their time doing whatever they want and is responsible for a large amount of Google’s breakthrough products. Providing 20% of “free time” may be extreme, but use the idea as a starting point to consider how you can allow employees to stretch their minds while boosting your bottom line.

Listen Actively

Employees are very rarely comfortable telling their boss or their boss’ boss how they really feel. Perform anonymous 360 degree evaluations. Everyone who interacts with an employee should evaluate them and that includes having subordinates evalute managers. Trust your employees to provide valuable, honest feedback and they will.

The second component to active listening is making sure your employees know consideration will be given to their feedback. If someone comes to you with a concern don’t immediately dismiss it no matter how outrageous or wrong you think it might be. Being dismissive and condescending is a sure-fire way to let your employees know they aren’t valued. Always have a follow-up conversation after a complaint.

Communicate a Common Goal

Have a clearly defined mission. Talk about it regularly. Post it on the wall. It should be short, memorable, and actionable enough for your employees to remember and repeat. If you find your mission needing a refresh, involve your employees in the re-writing process.

Hire the Right People

Just because you need someone right now doesn’t mean you should hire the wrong person. The long term costs of poor hiring decisions are too high. Sometimes the most important factor when evaluating potential hires is culture, followed by work ethic, and finally by relevant experience.

I once worked in a tight-knit group of about 10 entry-level employees with a culture of mutual learning and respect. A middle manager was hired who clashed with the culture of both the organization and small group. Before long, after being thrust into a backstabbing and pompous environment all but one member of the team had resigned.

Employees are Humans First

Every one of your employees has a brain, a heart, and a soul. They also have a past, present, and future. Respect them as individuals. When appropriate show an interest in their lives outside of work. Your employees are not your enemies or your competition. Quitting is a lot more fun when you work for an asshole.

Have you worked in an environment with high turnover? What could the employer have done to keep people from quitting?