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Strategies for improving employee retention, part II

The big picture.

Our recent posts on the advantages of agile organizations, best hiring practices, and the critical importance of new hire support underscore the following conclusions—

  • New startups with high-tech employees foster greater creativity and productivity than ‘legacy’ (hierarchical, military command style organizations). However, many of the efficiencies of agile startup organizations, including things like cross-silo collaboration, can be adapted to legacy organizations.
  • All organizations, whether ‘agile’ or legacy, require a combination of proven hiring practices to remain competitive.
  • Your new hires and valued senior employees will bail if you fail to provide a friendly, supportive work environment that encourages professional development. Be aware that companies spend approximately $50 B ion recruiting, yet almost half of new hires leave within the first year.

Additional strategies for retaining employees

  • Track employee satisfaction

Develop and distribute anonymous employee satisfaction surveys on a regular basis, periodically updated with questions to get feedback on changes in your work environment. Leveraging this bottom to top feedback allows you to uncover problems that otherwise can spin out of control. This, in turn, contributes to higher employee retention.

  • Develop skilled, autonomous employees so you can promote from within

When you provide the necessary leadership, resources and training for employee development, you can delegate more work with much less oversight. This frees up your time with the still greater benefit of giving your employees a surer sense of their professional value, along with improving their collaboration, creativity, and loyalty. Of course, with independence come risks and, inevitably, some failures. Encourage your employees to learn from their mistakes to grow professionally. When you invest in your employees’ professional development, it’s easier for you (and better for morale) to promote from within.

  • Provide frequent, interactive performance feedback

An effective performance evaluation system begins with creating clear, trackable metrics that both employees and managers accept and understand. However, the old model of one performance evaluation a year with the manager providing one-way feedback to the employee isn’t effective. A much better approach is to provide more frequent performance feedback with an emphasis on two-way communication between the employee and manager. Employees should always feel comfortable sharing their concerns and suggestions for improvement.


  • Train managers and supervisors in effective communication and principles of leadership

When managers fail to model respectful, effective communication, employee retention drops dramatically. In fact, dissatisfaction with one’s reporting manager is the most frequently cited single reason for leaving a company. This is why it’s imperative that your managers get all the training and coaching they need to communicate effectively and behave professionally. –Too often, the technically most skilled employees are promoted to management without the requisite skills or necessary training to be good managers.

  • Tailor work incentives to the individual

Individual employees are motivated by different things. Offering the same benefits and work parameters to everyone without regard for different employee needs contributes to higher turnover. It takes time to develop options for flexible working hours, work-at-home and benefits options, etc., but by doing so, you increase employee satisfaction and retention.

When you recognize employees for outstanding performance, you reinforce their loyalty. The same principle applies to recognizing and encouraging all employees whose performance has improved. While offering material incentives can also advance performance, simply thanking employees for improved performance is usually enough to reinforce their forward momentum.

  • Emphasize health and wellness

When you launch a wellness program, you demonstrate support for your employees’ work/life balance and stress management. Because our digital devices give us instantaneous, 24/7 contact both with work and family/friends, employers need to recognize that cleanly separating those two domains is no longer possible. Consider offering flextime, telecommuting and other work options that make it easier for people to manage their work and personal demands. Understand that employees whose personal (and work) needs are validated by generous paid leave policies, flextime, telecommuting and other work options, etc., will also be there for you when you have a crisis at 9 pm.

Finally, employees aren’t machines. They need breaks–at least every 90 minutes. Employees who work overtime with no breaks lose focus and are much less productive and creative.

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