5 Easy Ways to Reduce Costs and Boost Employee Retention
By definition, idioms aren’t literal expressions. But some, like “trim the fat,” which implies a reduction in number or volume, can steer you in precisely the wrong direction.
If you’re looking to trim business fat, you’ll probably look to labor costs, which can account for up to 70 percent of a company’s expenses. But before you sink the knife into benefits or salaries, remember that replacing a salaried employee costs six to nine months’ worth of his or her pay. For an engineer making $120,000 per year, that cost can reach six figures.
How else to cut labor costs? Add programs. From pet-friendly offices to on-site health services to sabbaticals, creative perks are increasingly popping up at the nation’s top employers.
The ball Is in your court. Don’t let the fact that you can’t afford every benefit on that list rain on your parade. The real question is: What do your employees need to feel appreciated, do meaningful work, and see a career path for advancement?
To give your team another reason to stay the course:
1. Set out healthy snacks.
What benefits would you guess workers want most? Health insurance? 401(k) matching? Paid vacation time? According to a ZeroCater survey, 60 percent of employees consider office snacks and meals one of their top three perks. All told, 88 percent of respondents said access to snacks was important to them.
Doesn’t snacking lead to higher healthcare costs via obesity and similar conditions? Not if you choose the right snacks. Companies like NatureBox have been in keying in to a growing market for healthier snacks by offering unlimited snacks for a flat fee of $20 per employee per month.
2. Make room for gurus.
Another perk more than eight in ten workers want? A path for career advancement. But while the Society for Human Resource Management found 83 percent of surveyed employees wanted advancement opportunities, just 20 percent felt their employer was responsive their ambitions.
The trouble is, not every worker wants or is right for a management role. Consider offering a “guru” track as well for those interested in growing their domain knowledge. Nicole Winstone, customer support manager at Hootsuite, reportedly increased the average tenure of a Hootsuite support team member from nine to 16 months in a single year with such a program.
3. Pay for volunteerism.
Especially for the Millennials on your team, it’s important to do work with social value. Cone Communications found that three quarters of the workforce’s newest generation would take a pay cut to work for a socially responsible company.
In response, more companies are providing employees paid time off to volunteer. But while around one in five American employers offer the perk, few provide more than a day or two. Novo Nordisk has gone the extra mile by giving its team members 88 hours, or 11 days, of paid volunteerism per year. In a blog post, Novo Nordisk’s associate director of U.S. corporate sustainability and social impact called the program “a win-win for employees, for our company, and for the charitable organizations, nonprofits, and communities that benefit from the dedication and generosity of caring volunteers.”
4. Schedule on-site massages.
Work can, quite literally, be a pain for many employees. The American Chiropractic Association reports that back pain is the single greatest cause of disability, and fully half of working Americans report back pain symptoms. All told, the condition accounts for more than 264 million lost work days per year, or about two days per full-time American worker.
Massages might sound like a perk for companies that require physical labor, such as those in construction and mining. But a surprising number of tech, finance, and healthcare firms have begun to offer the benefit. Cisco Systems, First American, OhioHealth, PricewaterhouseCoopers, Scripps Health, and more have decided it’s a worthwhile investment.
5. Remember to say “thank you.”
Sometimes, what makes a job worth it isn’t the salary or benefits package; it’s hearing “thank you” from a customer or co-worker in a pinch. Believe it or not, 70 percent of employees told Reward Gateway that morale and motivation would improve “massively” if their managers said “thank you” more.
Reward Gateway’s research aligns with findings by David DeStano, a psychology professor at Northeastern University. “When we make people feel grateful… they’ll show loyalty to those who have helped them even at costs to themselves,” DeStano wrote in The New York Times. DeStano argued that helping workers take pride in their skills encourages them to wait for future rewards and work harder to help their team solve a problem.
Will office snacks, massages, advancement tracks, and thank you’s keep every employee from leaving their post? Of course not. But if they can keep even one team member from quitting, then they’ve more than paid for themselves. Those four or five figures in trimmed fat may not show up on your balance sheet. But it’s still a savings -- and a method -- you can take to the bank.