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Developing a formal and effective employee retention strategy

Companies that are struggling to retain employees have not implemented the appropriate solutions.

As the global economy strengthens, businesses today are experiencing increased pressure to retain employees. People are becoming more comfortable leaving a company they are not completely satisfied with and seeking employment elsewhere. Over the past few years, the unemployment rate has remained relatively steady at approximately 5 percent. For some industries, however, that number is even less.

CIO Senior Managing Editor Rich Hein recently reported that the unemployment rate for the technology market is about 3 percent. As the Internet of Things makes its way into virtually all aspects of business, it makes senses that IT professionals are becoming an especially valued commodity. Their skills are in high demand because operational efficiency and innovation hinges on digital technologies.

What causes employee turnover?
As unemployment rates remain low, job opportunities are growing, pressuring companies to not only retain essential talent, but to recruit key members as well. And this is no easy task. The world of business is becoming increasingly competitive, making it imperative for organizations to go above and beyond to stand out to potential hires while ensuring current workers are satisfied.

There are a number of reasons why a staff member may decide to leave a company and look for work elsewhere. According to research gathered by Infosecurity Magazine, some of the major drivers are that their work isn’t challenging enough, there aren’t enough training or learning programs available and because they want better pay or more flexible benefits. In addition, there are a handful of intangible factors to consider, such as corporate culture and office location.

Sure, there will always be at least some degree of employee turnover at a company. No business will have 100 percent retention all of the time. But there are ways to significantly reduce the loss of key staff, and it is essential that managers take advantage of these strategies since the cost of replacing an employee can seriously impact overall performance.

Realizing this is what has caused so many organizations to restrategize their approach to hiring and retaining workers. For example, it seems more and more businesses are beginning to offer flexible perks or teleworking opportunities to appeal to younger generations.

“Retaining staff can be a fine balancing act that needs the precision of a NASA engineer landing a rocket on a comet,” Javvad Malik, a security analyst, told Infosecurity Magazine. “On one hand employers need to provide appropriate compensation and working environments. While on the other hand, remaining mindful that other companies will make high offers in attempts to acquire the right candidates.”

Understanding what makes staff happy
Although reducing turnover is essential for every organization, a crucial step in ensuring the engagement, satisfaction and, therefore, retention, of a worker is to understand what motivates them and makes them happy. Business executives should adopt an agile model that allows them to prioritize and appeal to various needs of different employees. For example, as Infosecurity Magazine pointed out, professionals that work in the tech industry, such as Web developers and IT analysts, appreciate ongoing training programs that allow them to expand their skill sets. They work in a rapidly evolving industry, so they want to make sure they are constantly presented with career-advancing expertise.

Offering education and development programs can improve retention rates. Watch the video to learn more.

By offering education and certification programs that provide members with the ability to stay proficient in the latest developments of their field, companies can reduce the chances of staff leaving to work for other organizations with seemingly more growth opportunities.

Restructuring retention strategies
A common tactic traditionally used by many companies in retention management is to conduct exit interviews. But while these assessments have the right intent, they are not exactly effective. The Online Recruitment Resource recently reported that, according to a study of mid-sized companies conducted by KPMG, it was found that, even after these interviews, about half of employers felt like they were still unclear about the workers’ honest reasons for departure. Furthermore, only 51.5 percent of employees said they were completely upfront and transparent about why they were leaving.

The research also indicated that there was a problem of having a formalized retention plan in place. Although the majority of respondents had some sort of retention approach, a whopping 44 percent revealed that it was fragmented and “not integrated into an overall strategy.” In addition, 27 percent of employers said their process was something they were essentially figuring out as they go.

Ongoing communication and feedback can help improve employee engagement.Ongoing communication and feedback can help improve employee engagement.

“Clearly there is a lack of honest and open communication around the issue of people leaving,” KPMG People Powered Performance Director Ingrid Waterfield told the source. “Indeed, our survey highlighted some disconnect between why employers think employees are leaving and what employees say themselves.”

Leveraging essential analytics and data
The KMPG study showed that 80 percent of employers conducted yearly performance reviews. However, this is clearly not enough. Only 49 percent of businesses said executives were provided with employee management training, less than half provided non-monetary rewards and incentives and just 30 percent implemented solutions for identifying and analyzing key performance indicators, or KPIs, of its members.

“Managers must be thorough and purposeful in employee retention strategies.”

To reduce turnover rates and improve overall job satisfaction and engagement levels, it is necessary for companies to adopt a thorough and standardized approach to employee retention.

One way businesses can resolve this issue is by facilitating ongoing communication and feedback between managers and employers, as well as offering anonymous surveys throughout the year. It would also be beneficial to have regular one-on-one meetings with staff members to ensure they are satisfied in their roles.

Furthermore, distributing surveys and consistently tracking and measuring engagement levels can provide organizations with enhanced insight into key performance metrics and help them glean the information needed to uncover and correct an issue before it leads to a turnover.

All of these tactics can be streamlined by working with a third party consultant that specializes in corporate performance, incentive and recognition solutions.

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