It’s official, the tables have turned and employees now have the advantage. Turnover rates are on the rise for the fourth consecutive year according to the Bureau of Labor Statistics — a trend that’s expected to continue due to the strengthening economy and societal changes. With more than a quarter million baby boomers reaching retirement age every month, and the younger generations being too small to fill the gap, employees can easily jump ship if they’re unhappy on the job.
Due to this trend, top talent will be even harder to keep around. No wonder nearly 60% of HR professionals think that rewarding and retaining employees will be their biggest challenge in the near future according to a recent survey by SHRM.
Surprisingly, it’s not always more money that keeps outstanding employees around. A competitive salary is part of the package, but even if your company can’t offer the highest salary, it doesn’t mean you can’t still compete for (and keep) top talent for years to come. Here are 5 key strategies of effective reward and retention programs:
Offer clear opportunities for advancement and promote from within. Organizations who do this not only keep their top performers, they keep morale high throughout the company. Your best employees (the ones you want to keep) seek opportunities to gain skills, knowledge, and grow in their career. If they can’t find these opportunities, they become dissatisfied and go elsewhere.
Make sure your best employees know they’re your best employees. A little recognition can go a long way towards job satisfaction. When top performers get no more recognition for their efforts than average or poor employees, they have little incentive to stay. It is imperative for high performers to feel they actively contribute to the success of their company.
Ensure managers understand that employees are appreciating assets. Their value goes up over time. Get all your managers on board with reward and recognition efforts by focusing on the bottom line. Replacing employees is expensive, with costs ranging from half to 2 1/2 times the position’s salary. It takes time for that investment to pay off as it’s the long term employees who contribute most to profitability and success.
Continually find new ways to reward excellence. Stop offering the same old incentives. Discover what your employees value and you’ll gain a real edge with rewards that matter. Depending on the person, your best employees might enjoy additional training at a fun location, a great parking spot, or movie passes and a Friday afternoon off. Rewards are only limited by your imagination, but keep in mind that people at different stages of life often value different things.
Remember, work-life balance is a top priority for many employees. In this multi-generational and multi-cultural workforce, there is one retention strategy that’s proving to be a hit with everyone — flexibility with scheduling and time off. This freedom not only decreases absenteeism and boosts morale, it is a difficult benefit for employees to give up (even for a job with higher pay).
There’s little doubt that new challenges are on the horizon for HR. It’s also clear that retention efforts are becoming critical to the success and future of every organization. So if your company doesn’t take the time to recognize and reward outstanding work, you risk losing your best employees to a place that will.