Employee Retention Plan: Setting Your Company up for Success
Maintaining and retaining a motivated and productive staff is vital to the success of every company. Hiring and training new team members takes valuable time and resources, which can affect your bottom line if positions become revolving doors over several months. Implementing an employee retention plan will alleviate high turnover rates, as the plan provides reasons and incentives for your team to stay employed at your company for longer periods of time. If you are still on the fence, don’t worry. We’ve compiled a list of reasons why your employee retention plan should be developed right away. Manage Employee Turnover Did you know that 33% of new hires will quit their job within the first six months of employment? Yikes! Because of the “fail fast” mentality of new hires, many companies introduce employee retention programs to build the relationship between management and their team. These programs typically consist of incentives like bonuses, paid vacation, health care, 401k plans and other benefits to reward employees for their hard work. Some companies even offer services like on-site dry cleaning pick up, gyms, and child care services to help improve their employees’ work-life balance. Retention plans are not only great for maintaining a healthy relationship with your employees, but also attracting quality candidates to your company. By offering great bonuses and benefits, potential employees will see that your company takes a vested interest in its team members. Cost Effective While it is important to invest in company training programs, taking in new hires on a revolving basis drains company resource. For every new employee you hire, you have to expend time, effort, and money into training him. In fact, according to the Society for Human Resources Management, “employee replacement costs can read as high as 50 to 60 percent of an employee’s annual salary.” Once training is complete, you have to wait for the employee to fully acclimate before seeing any real productivity from him. This results in a loss of resources that could be used to help grow the company. Maintain Performance and Productivity Replacing employees can be detrimental to your company in several ways, including work performance and efficiency. Unfilled positions could sit open for weeks (or months), meaning your team is picking up additional work and stretching their productivity thin until a new body is brought into the department. However, even after a new hire is brought in, you will still need to manage his mistakes and hand-hold him until he overcomes the steep learning curve that comes with a new job. Motivating your team and keeping them engaged is key to reduce vacancies – otherwise you may be repeating these activities several times per year! Increased Morale It should come as no surprise that satisfied employees enjoy the work that they do and the environment they work in; this satisfaction is likely to lead to employees staying with their employer for many years. Retention plans are important because they help to create and maintain a positive work environment, strengthen employee relationships, and improve trust. All of these factors help to improve employee morale, which creates motivation to come into work, to be productive, and do a good job. Successful employee retention plans not only aid in making your workers more motivated and satisfied, but they also help maintain performance, productivity and employee turnover. To see growth in your bottom line and increase your employees’ morale, gather your management and employees and implement a plan that works for your company. Emplicity understands that HR Outsourcing should be simple and meaningful. As a Professional Employer Organization (PEO), we strive to be a great partner in supporting your business. If you would like to request more information on how we can assist your needs, please reach out to us at 877-476-2339. We are located in California – Orange County, Los Angeles, and the greater Sacramento and San Francisco area.