No matter what industry you are in, how large your organization is, your employees are your greatest asset. While you may be head of your business and ultimately be the decision maker, it is your workforce who have the greatest influence on your business’s success. Research has shown that in the average business, 55% of employees are looking for other work opportunities, which means that right now, your business could be at risk.
When staff leave, it not only impacts the workflow of operations but consumes large amounts of time and resources finding a replacement who has the skills to fulfill the role. You also need to add in the time that it takes a new employee to settle in and get to grips with the processes and procedures of the business, to understand the dynamics of the business and the key relationships you have with customers, clients and suppliers.
If you are regularly losing employees, you need to pay serious attention to the workplace culture that your business has. The retention rate is indicative of the health of your business and reflects how engaged your employees are with the business.
To calculate the retention rate:
- Identify the timeframe you want to use. If you regularly have leavers, use a shorter timeframe such as a month, or six months.
- Identify the number of leavers that you have during the defined timeframe
- Identify the number of employees you have during your defined timeframe
- Divide the number of number of leavers by the number of employees
- Multiply the number by 100
Click here to see the average retention rate broken down by industry type. Some industries traditionally have higher retention rates than others; for example, fast food outlets, retail and hotel industries tend to have a more fluid workforce than say government positions. Compare your business with industry figures. How have you performed?
If your retention rate is on the high side, you need to address how you can sustain and improve the rates.
What is employee loyalty?
Employee loyalty is when your workforce feels attached to your business. They feel compelled and motivated to do their role to the best of their ability; they are in-tune with what the business needs and devotees to maintaining the business’s success. They consider that working for your organization is their best option, and they can see their future with their business.
Offer fair wages and perks
You must ensure that you provide your workforce with a fair recompense for their time and the skills that they bring to your organization. As a minimum, people expect to be paid as much as others are paid in equivalent businesses.
While it makes business sense to keep wages as low as you can go, you will be doing the business a disservice in the long run. Underpaying employees means that they feel undervalued and under-appreciated. You should also be mindful of paying employees the same wage if they undertake the same work. They should not be penalized for being less confident at negotiating a pay package when they join the company, or long-term employees not having their wages matched to new starters.
Employee loyalty is emotion led, and typically is not achieved by their wage packet alone. People want more from their employer than just a fair wage. So, what else can you do to enhance your workforce’s loyalty?
Provide opportunities for career progression
Retaining talent is vitally important for your business, you risk losing company knowledge, a disruption to workflow and a decrease in the morale and engagement of the people who stay behind. There are multiple benefits to your business if you provide opportunities for your employees to further their career, and it is one of the most cost-effective ways to boost employee loyalty.
Career development opportunities enable valuable employees stay within the business rather than look elsewhere when they want to climb the corporate ladder. If you can, invest in the education of your key performers, for example, they can study an MS in Lean Manufacturing online so that their study doesn’t impact on their day job. The business will benefit from knowledge sharing and enhancing the skill set of the team.
A business with strong career development strategies in place shows employees that it cares about them. It is also incredibly motivating to see how your efforts at work can be rewarded.
Keep the good employees, remove the bad ones
Employee loyalty can be seriously compromised if the bad behavior of individual employees is not dealt with. People spend most of their waking hours at work, and so the environment should be as stress-free as possible in the circumstances.
There is a difference between different styles of communication in the workplace that can be remedied by trust-building and mutual learning training, and bullying. Brushing off even low-level bullying incidents can be seen to condone them, and so guidelines should be in place that outlines unacceptable behavior. Your employees should have confidence that they can report any issues and that they will be dealt with appropriately.
You need to have strong HR policies that clearly state that individuals who breach the guidelines will not be welcome in the workplace. Nobody wants to feel bullied, victimized or abused in the workplace. Obnoxious behavior should not be tolerated and dealt with swiftly.
Staff turnover and employee engagement play a significant role in any business’s success. Employees who are engaged at work feel valued and appreciated for their contribution to the business. Employee loyalty is not just about the wages that you offer, its about having expectations and possibilities for personal growth and feeling valued on an emotional level.
A successful business fosters a culture of community-based on what the teams can achieve together, rather than individuals who happen to work in the same space. Camaraderie is important, collaboration is important, but perhaps the most significant influence is respect. If your employees feel respected, they will be loyal to your organization in return.
