It’s Monday, which means odds are good that nearly one-third of your employees are looking at a new job. The truth, however, is that Monday has nothing to do with it. Employees are looking and employers are faced with turnover rates that are higher than ever and worker tenure levels that are dropping. In 2014, the average worker had been with his or her employer for 4.6 years; today it’s only 4.3 years.
There are plenty of strategies that employers can use to reduce employee turnover and prevent valued employees from leaving. But the first step is understanding the myths surrounding employee retention. That way businesses can focus on real solutions that keep valued employees from considering a new role in the first place.
Employee Turnover Myth #1: Counteroffers work.
Truth: According to research by insights firm CEB, 50% of employees who accept your counteroffer will still depart the company within a year. What does this mean? Keeping a valued employee doesn’t always come down to cash. In fact, there are other drivers that can be even more compelling than a pay raise. A 2015 survey by Glassdoor actually found that 80% of employees would prefer a better benefits package instead. Get to know what your employees value!
Employee Turnover Myth #2: You can’t compete with big business benefits packages.
Truth: Great benefits are attainable to all businesses … if you know how to access them. It’s true that smaller organizations are up against the buying power of Fortune-500 companies when competing for benefits offerings. But it’s also true that similar benefits packages can be available even to small businesses if they work with a PEO (Professional Employer Organization) that offers them.
Stratus.hr provides access to affordable benefits packages for each of its clients’ employees. “We work with businesses of all sizes,” says John Farnsworth, CEO, “and leveling the playing field is important for each of our clients when recruiting new staff. We’re able to use the collective bargaining power of all our clients’ employees to give everyone access to better benefits. So even if a client has a staff of 12 people or fewer, they can still have affordable health, dental, and life insurance, 401(K), disability, and any other benefit that a big enterprise may have. And employees can access their insurance information 24/7 through our tech portal or via the employee app.”
That’s great news for smaller businesses since that same Glassdoor survey found that 96% of millennials would leave a job for a better benefits package.
Employee Turnover Myth #3: Smaller businesses don’t have time or resources to develop retention plans.
Truth: Regardless of size, all businesses need to stay focused on retaining good talent, particularly when they factor in the costs of turnover. The real costs to replace an employee are higher than most companies estimate and include everything from recruitment ads to lost productivity and ramp-up time.
Businesses that don’t have the resources in-house to create a workable retention plan may be able to turn to an HR outsourcing firm for assistance. “For employers, it’s good to have insight beyond their own industry,” says Farnsworth. “You might have a developer or a customer service rep who you really value. But just because your business builds air conditioners doesn’t mean that employee’s skills won’t be valued in healthcare, too. Since we work with so many different types of businesses, when we help with a retention plan, we always advise on motivations based on position, not just industry. It helps.”
Employee Turnover Myth #4: Sometimes employees are just ready to move on.
Truth: You know how concerned you are about losing that star employee? That employee is just as concerned about losing their great employer — YOU. Preventing employees from leaving can sometimes be as simple as talking to them about career growth and movement, or even posting in-house opportunities. CreditSuisse, for example, now calls employees to inform them of new, internal job opportunities. “In 2014 the program reduced attrition by 1% and moved 300 employees, many of whom might otherwise have left, into new positions. CreditSuisse estimates that it saved $75 million to $100 million in rehiring and training costs,” reports Harvard Business Review.
Employee Turnover Myth #5: It’s never okay to lose a good employee.
Truth: Some turnover IS okay. The lesson here is don’t shoot the moon trying to keep one employee. But be sure you’re not waiting to start the “save” either. Ensure all employees are properly onboarded from day one so they feel welcome, understand what’s expected, and know where to get help. Access to an updated employee handbook and information about benefits can help an employee understand the business, their total compensation package, and the company culture better, as well.
Empowering employees with information and motivation is one of the best ways to keep them in place. Otherwise, employees may try to leave a good thing without ever realizing how great it was for them.
Small companies DO have the capability to compete with big businesses for talent and retain their super stars without having to be a large organization. For information on how to get started, contact Stratus.hr.