Why You Need Employee Retention Plans
It’s that time magical time of the year again! Time to pull out that worn legal pad and make a list of business priorities for the next quarter, or for the comfortably delusional, time to dust of that project plan from 2009, find a mirror and declare, “Next year is the year I finally implement these gems.” When attempting to identify top quarterly priorities, business owners immediately include increasing revenue, strengthening cybersecurity, or creatively marketing to new clients. While these are all important priorities, something as crucial as identifying and retaining key employees often finds a spot somewhere in between, keeping the break room stocked with the latest trendy sparkling water and taking care of that squeaky sound the door to the corner office makes every time it opens.
Why does identifying and retaining key talent deserve a higher place on the priority list? According to Work Institute’s 2017 Retention Report, the replacement cost of a median salaried employee is 33% of their annual salary and the median tenure of an employee aged 25 to 34 is 2.8 years (The Bureau of Labor Statistics: Employee Tenure Report.) Implementing procedures to retain key employees significantly reduces costs associated with knowledge leak, recruitment, and retraining – while boosting company morale.
Step 1: How to Identify Key Employees
The process of identifying key employees begins with monitoring company specific performance indicators. How many new clients are added on average monthly? What is the ratio of total cost incurred (including salary) to total fees billed? Always remember that performance indicators are merely snapshot metrics. Common sense will help identify standout talent by simply asking, who are the employees that begin scheduled time off and leave the rest of the office sighing because everyone else’s productivity will have to double to offset the absence of that key talent?
Step 2: Align Goals
Just as the likelihood of personal relationships thriving correlates directly to how closely aligned personal goals are, business relationships last longest when all parties share the belief that they are working towards a common business goal. Are you keeping key employees informed on where you stand towards completion of goals? Are you giving key employees a meaningful voice to contribute to achieving company success?
Step 3: Reward Key Talent
We have all seen talent salivate upon hearing of the next Silicon Valley startup announce its newest employee perk. Most business owners cannot afford a concierge/masseuse/3-star Michelin chef on-call with a skillet and coconut oil during every break. However, nothing prevents leaders from discovering an employee’s favorite charity and marking milestone accomplishments with donations. Rather than costly rewards, most people value the knowledge that their leaders take the time to appropriately recognize contributions.
Hopefully your next round of priority/project planning includes a detailed section of employee retention, with important actionable items. If you’d like to talk more about what that looks like for your business, contact us here.