Findings from a Chartered Institute of Personnel Development (CIPD) study suggest companies’ focus on employee retention fell in the aftermath of the financial crisis. Over the last few years, it’s become a priority again.
Only 22 percent of companies surveyed reported they had no difficulty in retaining employees, meaning the other 78 percent struggle to keep their people around.
However, research provides us with a handful of retention solutions:
1. Find the salary sweet spot. At Namely, we recently analyzed more than 13,000 salaries in high-growth fields like technology, ecommerce, advertising and digital media. We found something we call the salary “sweet spot” where employees within a specific salary range are more likely to stick around.
It turns out 79.5 percent of employees making between $80,000 and $100,000 remained with their companies for two years, yet those compensated above and below this range were 45 percent more likely to leave.
2. Take care of top performers. Incentives for top performers are important. We found high performers were 116 percent more likely to stick with the company than low performers.
Additionally, the top performers making more money find satisfaction in being paid what they’re worth. On average, they made about 35 percent more than low performers and 27 percent more than core performers. This is nothing new, but continuing to recognize performance will help retain employees.
3. Cultivate ownership. A Stanford University study on rural water systems showed that workers with a stronger sense of psychological ownership have higher job satisfaction and organization-based self esteem.
Cultivate a sense of ownership in employees by showing them how their role directly affects others in the company and client success.
4. Offer perks employees really want. Companies might offer a cell phone, travel reimbursement plan or even sodas in the break room, but in today’s modern workforce, those perks have moved more toward standard than competitive. Today, employees seek more intangible perks like a sense of community or a boss who understands them.
Many companies achieve this by offering perks that help with team bonding. In fact, 55 percent host company picnics, and 5 percent allow employees to bring their pets to work.
5. Build a strong company culture. Company culture is like an unspoken code among team members. It’s a system of values and norms everyone consults when making decisions. The presence of a company culture makes a big impact because employees inevitably face choices that cannot be regulated by a black and white rule book.
Company culture research tells us that integrity adds value to a job, positively correlating with financial performance and attractiveness of job offers.
6. Offer growth opportunities. The CIPD study found that increasing learning and development opportunities plays a significant role in increasing employee retention. Another study found that promotion opportunities were a major psychological factor in job satisfaction.
It’s apparent that companies need to offer advancement opportunities as a goal to work toward to retain employees. Employees who are bored or feel trapped will go somewhere else that gives them the room needed to grow their skills.
7. Be flexible. Companies are starting to notice the new generation of employees has different expectations of a job. We need to prepare for and accommodate the younger workforce’s sense of empowerment to decide when and where they work.
Statistics show that working remotely is on the rise with the telecommuter population, increasing by 79.7 percent from 2005 to 2012. Now, at least 2.6 percent of American workers consider home their primary place of work.
With these new workforce trends, employers are going to have to look beyond the traditional ways to retain employees. Today’s workforce is not the same as it once was. While our study showed that money does make a difference, it is not the end-all solution to employee retention. To foster job satisfaction and retain employees, companies must balance many factors, both tangible and intangible.