Your “Investment”:
How to Retain Good Employees

In last months article we discussed your new hire and how to assimilate them into your workforce effectively. This month we will focus on your “investment” and how to retain good employees.

All companies want and need to retain good employees in order to keep their businesses thriving. Employee retention is one of the critical measures that speak to the health of your organization. Employee retention is critical to a company's long term health and success. When you are able to retain great employees it spills over into your customer satisfaction, product sales, satisfied coworkers, effective succession planning and deep organizational knowledge and learning. We are in a competitive job market. If you are not paying attention to your employee's needs and wants they can easily be recruited to work for your competition. However, if you succeed in making your employees feel valued they will be loyal and motivated to stay with you.

Failing to retain your employees can be extremely costly for your company and may effect how successful you can be. Reducing your turnover will help you to reduce your overall cost and get you more on the bottom line. Here are some of the costs associated with turnover;

  • Separation Costs: Administrative time, Additional payouts ie; severance, vacation, lawsuits, unemployment
  • Vacancy Costs: Additional overtime, contract or temporary worker costs, loss of productivity, displaced management time
  • Replacement Costs: Advertising, administrative time, drug testing, interviewing time, re-orientation, re-training

There are a few key things that companies can do to retain their employees. One of the most important actions to take is to be sure you have effective managers/supervisors and/ or leads in place. People leave managers and supervisors more often than they leave companies or jobs. Employees in lead positions have a critical role in your employee retention. Anything they do to make an employee feel unvalued will contribute to turnover. Here are some things that supervisors/managers and/or leads can do to create a healthy environment for your employees:

  • set clear and achievable expectations for employees
  • offer feedback about employee performance
  • set consistent meetings for employees that offer critical information for their jobs
  • develop your employee's skills by understanding their goals and objectives within the organization
  • recognize and reward achievement and hard work
  • listen to your employees and involve them in decisions when possible
  • create incentives (talk with employees to find out what they value)
  • set a good example

Another key thing companies can do to retain employees is to motivate them through incentives. This will take thought, planning and action on your part. You will need to find out what your employees value and if those are things you can provide. There are two types of incentives; hard and soft side benefits. Hard benefits would be things such as; base pay, benefits and tips. Soft benefits may be things such as; flexible work schedules, employee discounts and company sponsored events. It may be different for different departments or companies but incentives help employees feel valued and empowered. It helps them feel in control of their success.

Take a look around your organization. If you are losing critical employees it may be time for you to re-evaluate. Administer and analyze exit interviews with departing employees. They will provide you with valuable information that you can use to retain remaining employees. You'll never have a more significant source of data about the health of your organization. Ask and then listen to your employees. Then act on their suggestions when appropriate.

Published Thursday, June 15, 2006

Bryon Peterson is the President of Human Resources Group International. HRGI is a group of human resources consultants with over 25 years of experience in the field. HRGI provides comprehensive human resources products and services to businesses throughout the United States, and Canada. Its mission is to provide an integrated and highly effective working environment for companies and their employees.

Experience Profit Improvement With Sophisticated HR Business Practices That Are Easy To Implement And Follow

For more information regarding our products and services, and to discuss your businesses needs and how we can best assist you, please call (206) 947-4905, or complete our contact form.