Employee retention is a key factor in the success of any business. It not only helps to reduce cost associated with turnover, but also ensures that the company has a steady and motivated workforce that can maintain productivity to stay competitive in the market. Investing in employee retention can help businesses save money and increase productivity.
Long tenured employees also build loyalty to the company which can lead to better customer service and increased customer satisfaction. In this article we will discuss why investing in employee retention is an important step for any business looking for long-term success.
1. Reduce Turnover Costs
Employee retention is key because investing a comparable small, predictable amount of money in retaining employees is actually a cost-saving strategy. As all companies work to reduce employee turnover they should consider these factors:
- According to a recent BambooHR study, the cost of replacing an employee can add up to 3x the salary for that role.
- Comparably, the cost to maintain an employee retention program is not only lower, but more predictable.
- Soft costs of turnover including the effect on the departing employee’s team, the time employees take to onboard a new employee and other opportunity and productivity costs that can be completely avoided by focusing on employee retention.
Employee turnover can be forecast, but like any forecast it’s never 100% predictable. Employee retention programs can be a predictable, budgeted program with no hidden surprises, helping control costs across the company.
2. Build Company Loyalty
Company loyalty is important to every business. Employers want their employees to like their work and the place they do it. That loyalty carries into the quality of work they do and the speed employees do their jobs. When considering how to build loyalty with newer and longer tenured employees consider the following:
- The longer your average employee tenure is, the higher the employee loyalty level is.
- Employee loyalty breeds customer loyalty.
- Acknowledging employee retention milestones benefits the employee and employer.
Employee retention programs are a great way to build and maintain employee loyalty by acknowledging and appreciating the time, energy and effort employees put into their employers’ business every day.
3. Maintain Productivity
Productivity is at the core of every business strategy. Especially in uncertain economic times, efficiency and on-time delivery of products, features and customer experience are keys to success. With low employee retention, businesses can easily run into productivity issues across departments. To avoid productivity issues consider the following:
- Employee retention and reduced turnover boosts company productivity.
- Maintaining productivity requires investment in employees- this could be learning opportunities, enhanced benefits or employee rewards.
- Employee retention maintains predictability in productivity which supports business goals and customer goals.
If your employees aren’t producing, your business will suffer. When an employee leaves or a new employee is onboarded, both the existing employees and the departed or new employee is affected and none are as productive as they could be if the departing employee remained in their position.
4. Improve Customer Experience
Employee retention may not immediately make you think of customer experience but the connection is undeniable. When employees have a long tenure with your company, they know the product, the customer experience and the customer base better. This leads to your customers having a better experience every time they interact with your team. Here are a few ways to keep that customer experience consistent:
- Keep employees motivated in their roles keeps a consistent customer experience.
- Make sure newer employees are schooled in customer experience early in their tenure so they can carry it with them.
- Reward employees for exceptional customer interactions.
5. Reward Employees in a Memorable Way
Employee rewards are key to employee retention and can play a key role in any employee retention incentive program. Adding employee retention-based incentives are a great way to round out your employee experience. These programs make employees feel valued and can offer an opportunity for recognition among their peers. When considering an employee retention incentive program:
- Use gift cards as employee rewards- they are flexible to remain budget compliant and offer employees the option to scale the value of cards based on tenure.
- Use brands like Wayfair to drive employees to use their rewards in their personal life- making the gift memorable.
- Gift cards provide the motivation in an employee retention program that a cash bonus cannot. Since gift cards can’t be used to pay bills or for household expenses, employees can focus those funds on buying memorable items or having memorable experiences.
Conclusion
Employee retention is key to any business and it affects more than just the HR team and the departing employees’ manager and direct reports. Employee retention should be looked at holistically because when it is maintained the business is stronger, the customer experience is more consistent and personnel costs are lower.
Kick off your employee retention incentive program today with Wayfair gift cards available through Engage2Reward™!
