High turnover rates should be a warning sign to companies. Not only do they decrease performance and morale, they can be very costly. To improve retention, businesses need to build a culture that is worth sticking around for.
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Culture is key to Retention
Many managers believe that employees abandon ship solely because of compensation issues. But retention goes much deeper than a paycheck.
47% of employees actively looking for new positions say that company culture is the main reason. The environment, expectations, peers, and mindset all impact an individual’s decision to quit.
In fact, one McKinsey study followed a firm that elected to only use nonfinancial measures to retain their top talent (including praise, promotion and leadership opportunities). A year later, none of these employees had left.
Culture-building is more effective than cash-throwing. As you seek to reduce the number of poached employees, consider these 8 ways to improve company culture and increase retention, simultaneously.
1. Start with Hiring
From day zero, HR departments and managers should evaluate candidates with culture in mind. In the initial interview, it can be easy to tell if a potential employee is a good fit.
As part of the interview process, share your culture with candidates. Discuss personality traits, work habits and mindsets that are typical to your employees and valued at your company. Invite potential candidates to ask questions about your business culture and answer their questions honestly.
Even if someone has the right skill set, they might not mesh with your existing culture. You and the candidate should be able to determine this during the interview process. It’s better to lose someone in the hiring process than to have them quit later on.
2. Empower Learning
Organizations without a strong learning culture are twice as likely to lose staff before three years time. Invest in proper training and continuing education for every employee in order to improve retention.
Employees want to be challenged, stretched, stimulated. They want to feel that they are succeeding in their positions, going above and beyond. Employees will not fail at their work if they have been trained how to excel.
Instill a dedication to personal development in your team by offering classes and skill enhancements. Provide career and growth opportunities that go beyond their assigned tasks. Being surrounded by a learning culture is empowering.
These education processes can be costly and daunting at times. However, it is more cost-effective to invest in current employees than to repeatedly hire and train new ones. It’s easy to wonder, what if we invest in employees and they leave? It’s better to ask, what if we don’t and they stay?
If you want quality, loyal employees, empower their learning.
3. Focus on Communication
Employees will stay if they feel that their voice is being heard. Regularly request feedback from your team and listen to the evaluations you receive.
Two-way communication is critical. Employees need to know that HR departments and managers will address every communication—and take action. Even if you are a good listener, doing nothing about employee issues will make them feel that they haven’t been taken seriously.
Set up clear processes for team member feedback. Consider establishing a monthly survey to gauge how individuals are feeling and to identify points of concern. Hold quarterly one-on-ones or reviews—not just to assess employees, but to listen to their grievances and to praise them for a job well done.
Communication best practices reaffirm to employees that their contributions have an impact. Employees value companies who listen to and remember what they say. Active listening takes time, but it’s worth it to build a strong company culture.
4. Promote Job Control
Establishing a culture of autonomy and job control will empower employees and inspire them to stay.
Let employees own their work. Don’t force them to follow a prescribed process unless it’s absolutely necessary. Give team members some leeway in how they accomplish their tasks. If the job is getting done, don’t micromanage. Creating a culture of accountability empowers employees to find joy in their responsibilities.
Additionally, offer some flexibility in work and schedules. No one likes busy work and we all dread monotony. Find a way to rotate jobs, teams and projects in a way that reignites passion and promotes productivity.
If you can, allow employees to work remotely when needed. This kind of independence instills a powerful trust in your team.
5. Reinforce Value
In order to build a culture that retains employees, you need to show some appreciation. We all have a deep desire to add value to the world and to find success. Regularly let employees know that they are making a difference and that you appreciate their efforts.
While monetary rewards are great, there are simpler ways to motivate employees. A thank you note or a quick email shows appreciation. Company-wide recognition like project spotlights or employee-of-the-month awards can also be meaningful. Find out what motivates team members personally and recognize their accomplishments.
It’s also important to ensure that employees know how their work contributes to your business’ goals. Individuals want to know why their work is relevant, to know that they matter in the big picture of your company. Unless you connect the dots for them, team members may not see their importance.
6. Build Team Relationships
Gallup polls have repeatedly shown a concrete link between having a friend at work and improved performance. For example, women with work friends are twice as likely to be engaged compared to women who say otherwise.
Strong team relationships are critical to company culture and retention. Not only do employees need to work well professionally, they need get along personally.
Provide opportunities for employees to get to know each other in a more informal setting. Sponsor office lunches and team building activities. Include independent contractors in office chats and jokes. HR departments and managers should take the lead in making friends. Create a safety net at work where connection and friendships are celebrated not shunned. The way team members treat each other says a lot about your business.
While some bosses may struggle with this mentality, it’s important to cite the old adage: people leave managers, not companies. Managers don’t need to buddy up with employees, but they should strive to avoid uncomfortable relationships if they want to keep their top performers.
7. Craft your Environment
Design can have a real effect on company culture. Employees spend one third of their day at work, so make an effort to craft a positive environment where they want to stay.
Things like lots of natural lighting and good ventilation can make a big difference. Aesthetics and design can help make an office feel comfortable, inviting, even inspiring. Encourage employees to personalize their own workstations with decorations. You could even offer a small stipend to individuals to allow them to purchase their own decor items.
Every nook and cranny should reflect your values. Stock your kitchen with healthy snacks. Create a space reserved for relaxing, laughing, having fun. In some office spaces, stress is tangible. Reduce this stress by creating an environment that promotes productivity, but also well-being.
8. Transparency and Respect Above All
More than anything, if you want to build a company culture that increases retention, you must be transparent and respectful. The modern worker can sniff out a phony from a mile away and if your culture is not authentic, you will push people out.
Your culture should match your industry and the vision of your founders. Embody your values in every step of the customer and employee process. Earn loyalty through your trust in others and commitment to company goals.
There also needs to be transparency and honesty about your organization’s financial stability. If employees feel that their livelihood is at stake, they will flee. Make decisions and inform staff in a way that instills confidence in management, not fear. Always demonstrate integrity so that employees know they can trust you.
If you want employees to stick around, you need to build a culture that means something. You can throw money at people all you want, but if you don’t walk the walk, you’ll never inspire teams and build greatness.
Jaren Nichols is Chief Operating Officer at ZipBooks, free accounting software for small businesses. Jaren was previously a Product Manager at Google and holds an MBA from Harvard Business School.