Almost a century ago, Henry Ford reportedly said: "The only thing worse than training your employees and having them leave is not training them, and having them stay."
Employees and staff are the lifeblood of your company, so finding the best strategy for retaining staff has understandably occupied the minds of great business leaders across the decades. In this article, we will explore nine staff retention strategies that companies can adopt today.
The importance of staff retention
“Replacing a loyal employee could cost you twice as much through recruitment," says Sonia Whiteley-Guest, Partner at The SME Partners, a growth strategy consultancy. The cost and disruption involved can be as much as 56% more than the salary of the outgoing person."
Emily Cuddeford is Head Baker, Partner and Recipe Developer at the Twelve Triangles bakery and café chain across Edinburgh and the Scottish Borders. She says retaining staff is important to her business in multiple ways because “the bakery is very labour-intensive and training takes a huge amount of time. Even if we employ a skilled baker, they won’t have been trained to work the way we do. It takes us a year to get someone to the point where they can do all the jobs in the bakery and that’s the best-case scenario."
Emily goes on to explain that "front of house [staff retention] is also really important because knowing a customer’s favourite coffee and asking how their appointment went yesterday is important for customer experience.” This, in turn, is good for business because customers who feel known and valued by a business are more likely to return.
Good retention rates are also important because they’re a solid indicator that your staff feel happy, and valued, which in turn increases productivity. Furthermore, high retention is a great way to attract top talent as it signals you’re an employer that staff want to stay loyal to. For example, if you can brag that 80% of your staff have been with your business for 5 years or longer, this looks fantastic when it comes to attracting prospective employees.
Why do staff choose to leave
Naturally, some team members will move on despite your best efforts. However, there are always areas that can be addressed: data shows that younger generations expect more out of work, including better salaries, mental wellbeing support and caring onboarding processes. They're also more likely to seek other opportunities if they don't feel these career preferences are being catered to [1].
“Post-COVID, it’s not just [better] compensation that people are looking for, it’s work that fits with their lives as opposed to making their lives fit with work," she says.
Staff retention strategies
1. Promote mental wellness
“Today, people are willing to put their hands up and say ‘this is causing me stress’, and I don’t think I’ve seen that before," says Whiteley-Guest.
Cuddeford adds that it is also important to recognise how economic volatility is making people's everyday lives harder, too. In response, business owners should consider the ways in which they can promote mental wellness. While it’s not always possible, this may include having a clear structure on working hours and the need to take breaks. Group lunches or social events are a good way to get talking. Also, being as flexible as possible when it comes to sick days can also help, and making yourself accessible goes a long way. Promoting mental wellness is all about creating a culture where your employees feel safe, cared for and able to speak up should they need to.
2. Healthy work-life balance
It may be easier for those with office jobs to vary their working hours and location than someone working in hospitality, but establishing a good work-life balance is always possible to some degree. Whether it’s having a contingency for short-notice absence (i.e. childcare) or being as flexible as possible over working hours can go a long way in any industry.
3. Clear managerial structure
Not only is hierarchy important for the day-to-day running of a business, but a good managerial structure is vital for employee retention. If a member of staff feels unsupported or underdeveloped, or they just feel as if they've been thrown in at the deep end without any structure or guidance, they may soon seek employment elsewhere.
Knowing who to report to, and who to ask questions of, is critical. “Having the right management structure is really important,” says Cuddeford. “As an owner, you can’t be there every single day and so it doesn’t matter how kind and supportive you are. If you’re not their daily contact, leadership and delegation are key.”
4. Added-value benefits
When you think of employee benefits, perks are often the first thing that leaps to mind. At Twelve Triangles, financial incentives are important, but by no means the only focus. “We also have simple perks, fruit and veg boxes for our staff plus coffee, food and paid breaks at work that can help with the cost of living and are really important,” says Cuddeford.
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5. Provide proper training
Failure to properly train staff adds unnecessary pressure to their work, which may increase the likelihood of their leaving. What's more, onboarding processes can soon become costly if they have to be repeated due to staff churn and poorly trained staff may also impact your bottom line.
6. Support career progression
“One of the reasons staff tend to leave is progression,” says Whitely-Guest. “Do they have a clear career path ahead of them? Do they know what development is taking place for them to achieve their goals? If they have a lack of clarity there, they might leave.”
7. Fair financial compensation
Paying your employees fairly and providing financial security is invaluable. Cuddeford recognises that there can be tension between what people feel they need to maintain their lifestyles and what the market can bear. Transparency, flexibility and honesty are key to resolving this tension, she says.
At Twelve Triangles, increasing remuneration isn't always viable for the business. But “perhaps we can give extra hours or have [staff] work a position where [they] might get extra tips, and we do regularly review what changes we can make that will benefit staff financially,” says Cuddeford.
8. Regular constructive feedback
The word ‘appraisal’ can be daunting for some employees, but these processes should be about constructive feedback and positive reinforcement, argues Whiteley-Guest. Making appraisals a positive process will help with retention efforts.
“In a lot of smaller businesses, there isn’t a robust appraisal mechanism," she says.
"Having feedback is crucial for people on a weekly or even daily basis. You don’t catch people doing things wrong, you catch them doing things right. Feedback, when you catch people in the moment of doing something right, makes them feel really valued.”
9. Strong workplace culture
“Culture is really important," says Cuddeford.
"We try to do nights out so people have a space to be together away from work. Birthday parties where we cook for them so we’re giving them our time and not just money."
Whiteley-Guest sums up the philosophy behind staff retention today this way: “People should earn enough and feel fairly paid, but they also want to get more out of work than money can deliver.”
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2. The £200 Annual Travel Credit can only be redeemed at the time of booking through American Express Travel Online at americanexpress.co.uk/travel. Full terms can be found here.
3. Membership Rewards® points are earned on every eligible full £1 spent and charged, per transaction. Terms and conditions apply.
Sources:
[1] Forbes, 3 Reasons Why Gen Z Is Job Hopping, 2022