Hanover’s Perspective
Four Considerations for Employee Retention
As the economy improves, some businesses may experience greater challenges with employee retention. In early 2016, Hanover County’s unemployment rate stood at 3.5 percent which equates to approximately 2,000 people. That number is down from 4.2 percent in 2015. As the job market tightens, some employees may transition to new job opportunities.
Nearly 75 percent of Hanover’s business population consists of small businesses. Small businesses often find themselves competing with larger businesses, and with larger human resources budgets, for top talent.
While the cost of replacing an employee often varies by wage and position, the Society of Human Resource Managers (SHRM) predicts that every time a business replaces a salaried employee, it costs six to nine months’ salary on average. For a manager making $40,000 a year, that’s $20,000 to $30,000 in recruiting and training expenses. Before you incur the high cost of replacing employees, please consider these factors in making your business a must-stay spot:
- Culture and Environment: Your company culture — often described as an organization’s values, personality traits and work environment — can go a long way in building staff cohesion and employee satisfaction. A positive company culture can include flexible schedules, on-site amenities, wellness initiatives and work-from-home options. Companies promoting these options are more likely to create employees who are deeply committed to their employer.
- Management Style: Employees enjoy both autonomy and a sense of purpose. Trouble sometimes begins when menial tasks are delegated to your top talent or when employees don’t feel as though they are working towards a goal. You should consider yourself a coach rather than a manager. Focus on coaching success, not managing tasks and time.
- Growth Opportunities: No one likes to do the same thing every day, every year, for the duration of their employment at a company. Enable personal growth and development through continuing education opportunities, management and leadership training, tuition reimbursement and cross training between employees.
- Pay and Benefits: You don’t necessarily need to be the top paying employer in your industry, but you need to be competitive. If you are losing talent or having trouble attracting talent, perform a pay analysis to ensure you’re in the ball park. If you can’t pay more to keep an employee who has found another position, consider intangible benefits. This can include additional time off, flexible work hours or improving how you show your appreciation.