If you’re a manager in the Financial Services sector, it’s not news to you that the employee turnover rate is high in your industry. Depending on which statistics you consult, the attrition rate ranges from 18% to more than 25% of the workforce, and it’s increasing with the changes the pandemic has required.
What you may not know is how expensive it is to replace an employee. According to Investopedia, when you factor in the time costs of recruitment, interviewing, and testing candidates along with training costs post-hire, “even an $8/hour employee can end up costing a company around $3,500 in turnover costs, both direct and indirect.” An estimate by ERE Media, a publication for recruiting professionals, is even more startling: “Would it surprise you to learn that it will cost at least 150% of a person’s base salary to replace him or her?”.
Clearly, it’s in your best interest to retain good employees. But in a June 2021 survey of US employees, Monster.com found that 95% of those surveyed are considering leaving their current jobs.
How can you persuade your employees to stay with you in this volatile job market? Consider these five strategies:
- Be flexible.
- Foster positive relationships with coworkers.
- Offer lifestyle perks.
- Recognize excellence.
- Provide professional development.
Let’s look at each of these strategies more closely.
1. Be Flexible
COVID-19 has changed the way we work—probably forever. The work-from-home option may not be ideal for everyone, but the last eighteen months have shown that remote work can have many benefits for both employers and employees.
Most employees cite burnout as their main reason for wanting to change jobs. If they can’t find a good work/life balance in their current position, they’ll look for an employer who can help them achieve that balance. Simply eliminating a long commute can add hours to a busy employee’s day, reduce their stress load, and increase their job satisfaction immensely.
For some employees, flexible hours make all the difference. When juggling the demands of child care, elder care, and other personal obligations, rigid work hours can add unnecessary stress. An employer who offers options that accommodate various life circumstances seems more like a benefactor than a tyrant. Employees are more likely to stay where they feel their needs are valued.
2. Foster Positive Relationships with Coworkers
Happiness on the job promotes employee loyalty. One important component of that happiness comes from good relationships with fellow employees. Not only are good relationships with coworkers important for collaboration and productivity; employees are more likely to stay where they feel connected to others. In fact, that human connection at work is what many employees value most about their jobs.
Human Resources Today states that “relationships are the second most important factor in job satisfaction (preceded only by physical safety factors).”
As a manager, you can promote positive relationships in many ways, even when some of your workforce isn’t onsite. Make it easy for your remote workers to communicate with in-office staff and with each other. Encourage team building with fun activities like a virtual game night. Be clear about expectations for remote employees and welcome feedback from them about their challenges, both with performance and with morale. For more suggestions, see “Managing Remote Employees: 10 Ways to Keep Your Virtual Team Connected”.
3. Offer Lifestyle Benefits
Lifestyle benefits go beyond the expected benefits package that typically includes paid vacation, medical, and dental plans. Of course, you must pay a competitive salary to attract and keep the best talent. However, benefits comprise an important part of overall compensation, and they can make a real difference in employee retention.
Even before the pandemic, according to a study by Harvard Business Review, “studies showed that about 60% of people considered benefits and perks to be a major factor when deciding to accept a job offer, and 80% of employees would choose additional benefits over a pay raise.”
Employee lifestyle benefits can include the following categories:
- Health and wellness (discounts on gym memberships, for example)
- Onsite childcare
- Petcare, such as pet insurance
- Financial wellness benefits
- Free or reduced-cost snacks at work
The study also points out that even something as simple as free coffee can improve employee satisfaction and loyalty.
4. Recognize Excellence
Everyone wants to know that management notices their achievements, especially achievements above and beyond expectations. But celebrating even the small wins can also make employees feel valued, and valued employees are less likely to leave.
Compliments and thanks for a job well done are free to the company but pay big dividends in employee loyalty. In fact, Human Resources Today notes a direct correlation: “Studies show that as the frequency of recognition increases, turnover decreases.” How much does it decrease? “Organizations with a ‘recognition-rich’ culture see 31% lower turnover and 79% of employees who recently quit their jobs cite a lack of appreciation as a major contributing factor.”
5. Provide Professional Development
Giving employees the opportunity to grow professionally is a clear win-win. In practical terms, you’ll reap the rewards of your employees’ new skills as much as they will. You’ll also increase employee loyalty by demonstrating your vested interest in their professional growth.
Offer a variety of professional development opportunities to accommodate your employees’ various interests, learning styles, and goals. Here are a few ideas to consider:
- Lunch and Learn classes
- Tuition reimbursement
- Internal mentorship programs
- Memberships in professional organizations
- Continuing education and certification programs
- In-service training
- Cross-training
Conclusion
Keeping good employees makes good financial sense. It also improves the work environment at your company because high turnover is stressful for the employees who must train and learn to work with new hires. In the current business climate, giving your employees many reasons to stay with you will improve your profits as well as the job satisfaction of everyone at your company.
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