Printer Friendly Version                                    Back to Capsules    Retention Taking the trouble to meet employee needs and retain their loyalty can boost productivity and have a strong impact on the bottom line. But these days it is becoming harder and harder to retain employees as the free-agent mentality and the erosion of loyalty towards corporations has meant greater mobility. Retention probably starts with figuring out what your employees want – both as a group, and individually. Money is important, but only to a point: Employees need to be paid sufficiently in order for them to stay, but money alone won't keep them with your firm. They are heavily influenced by factors like the chance for advancement, training, and to do work that appeals to them. They can be demotivated by heavy-handed supervision, lack of control over their work, and too much work leading to a work-life imbalance. Managing retention begins from the moment you start to seek a new employee and doesn't end until after the exit interview for employees who are leaving, when you can gather useful information for holding on to those employees who (so far) are staying. Four Areas Critical to Retention Four areas are critical for mapping out a game plan to keep your best and brightest: Creating a comfortable work environment; providing opportunities for development and career opportunities; managing employee performance; and, recognizing and rewarding performance appropriately. You need to create policies for your workplace that show employees you want to retain them – that you intend to assist them in their work and not put barriers in their way. People want to feel as if they are a vital part of something larger than themselves - that their work contributes to helping others. They also want to feel that they are valued and appreciated by their colleagues, so it's important to create a sense of community. The best employees want to improve and advance, and they expect the company to help through training. That can be tough for small business owners, who instinctively view training as a cost rather than seeing it as an investment, but it's vital you overcome any such reticence. And once you announce and start training programs, follow through – too many companies don't, and that can annoy employees even more than not having training programs. Performance Reviews Performance reviews are also something small businesses tend to avoid. But again, done well, they are vital in retention, helping the employee to know where he or she stands. In performance reviews, the strategies and the goals of the organization must be translated down to goals for each area of the business and each specific job. The goals are best developed in co-operation with the employee and must be specific, measurable, attainable, realistic, and timed (SMART). Finally, a process needs to be established for monitoring progress towards the goals and providing feedback. Compensation Employees want to know they are being compensated fairly. That involves not only their own innate sense of fairness but also whether their compensation is fair considering what employees make at comparable jobs elsewhere and what their colleagues make. Increasingly, companies are trying to edge into linking pay with job performance and adopting variable pay systems in which employee compensation fluctuates according to business performance. There are a host of options for this, from lump sum merit awards to stock options. Obviously you also need suitable benefits packages – from dental, prescription, and vision-care plans to pension plans and vacation pay – in order to be competitive. No one item will serve as a magic bullet to ensure retention in your work force. This is an area where you must thoughtfully address several key considerations and develop a policy that works well given the aspirations of your employees and the resources of your company. If you would like more information or assistance with Employee Retention for your organization, please contact us.