Employee retention is a core responsibility for the HR department because companies need to hold on to their best workers in order to avoid diminished productivity and recruiting costs. Unfortunately, some businesses believe that compensation is the only factor that can convince employees to keep their current jobs. Dennis Hoffman, CEO of Engage Direct Mail, told Inc. Magazine he learned that's not always true.
"I never know what's inside people's heads. I used to assume everybody's ambitious because I'm ambitious and that everybody's motivated by money because I'm motivated by money, and I've learned through painful experience that that's not the case," Hoffman said.
There are many elements that go into an employee retention program. The following is a look at what workers want and how HR departments can satisfy those desires.
Benefits packages
Compensation is only one key factor when it comes to employee retention. However, benefits are equally important to some staff members so organizations that don't offer substantial perks will likely have high turnover rates. Business 2 Community explains that the substantial benefits packages are what make government jobs so attractive to workers and that offering minimal services will likely cause dissatisfaction.
As a result, every HR department should consider an employee benefits program. Having a well-defined policy will ensure that staff members understand what perks are available so they won't become dissatisfied and search for new opportunities.
Financial partnership
Some companies have found success by eschewing the traditional compensation model in favor of paying employees based on how well the business is doing financially. This strategy ties a staff member's income directly to the enterprise's bottom line so it behooves him or her to actually put forth a strong effort. Deirdre Lord, owner of the Megawatt Hour, told The New York Times that she's found success with this approach.
"I've always found it very effective to make sure people can share in the financial success of the company. It's not just compensation – it's giving people equity and making sure the people who work with you really feel like they are not cogs in the wheel," Lord said.
Indeed, this may be an effective way for companies, especially growing businesses, to ensure that top talent won't seek greener pastures elsewhere. If employees know that their compensation will increase as the company's does, many staff members will stay in order to reap the rewards of their labor.