Employee retention is one of the biggest challenges that employers and business owners face. A high turnover rate spells burden not only on operational and administrative work, but most especially on costs.
Hiring and training new people is often more expensive than growing existing talent. Imagine spending substantial amounts of time and money on creating job postings or dealing with headhunters, as well as working on paperwork in bringing new employees into the system only to lose them just a few months later.
Thus, companies need to have a deeper understanding of strategies that can help them retain employees better. Here are a few simple ideas to start with in preventing high and fast attrition rates among your people:
Develop a competitive compensation plan
Many organizations make a good job of attracting new talent by way of an irresistible compensation package. However, with the highly competitive market, the company’s compensation system may not be responsive enough to keep up with many other attractive prospects from other companies.
A dynamic and well-planned incentive and compensation plan is key in retaining your best people, especially in fields such as sales. Employees are often no longer blinded by just a hefty salary. Rather, they look at the overall picture of compensation, which may include other opportunities to earn more such as through commissions or bonuses.
Compensation should not be stagnant or slow. Instead, employees need to feel motivated to excel and do more in order to earn more. This also establishes a more effective culture of positive reinforcement, one of the most basic tricks in the book of human behavior.
Simplify and automate the compensation system
It’s one thing to develop a good compensation system, but it’s another thing to make people understand it. Many companies get mired in very complicated incentive and compensation systems that employees become disinterested in them. Worse, employees may end up with a big distrust toward management for coming up with such cryptic or seemingly impossible plans to achieve business goals.
Many companies these days are relying on automated incentive and compensation management software that makes it easier for both management and employees to appreciate the set-up. Automating computations also lessens human error and keeps employees more enthusiastic in getting on with the program.
Software solutions also make the incentive and compensation system more accessible to all concerned. These can be accessed either on primary office computers, or on laptops and mobile phones. It also makes transactions and reward criteria transparent, and encourages participants in the system to increase their participation in the system.
Assess and develop talent
Human resources needs to implement an equally effective and credible performance evaluation system in order to create a dynamic environment of home-grown talent. Employees, especially star performers, need to feel that there is a future for them within the organization. It may not necessarily mean a promotion or financial reward, but additional benefits, perks or simple recognition for a job well done.
Management should also keep an ear close to the ground on employee needs. It is important to establish an open and trusted feedback or communication mechanism where ideas are freely shared and valid opinions are valued. A top-down approach to management is no longer relevant these days, especially with the advent of social media and many other avenues of communication.
The good thing about compensation management software solutions is that data on employee performance and other metrics can also be gathered and analyzed in a more timely manner, in order to guide and enhance periodic performance evaluations. Often, human resources steps in too late when it comes to issues of employee disengagement. With a more real-time method of monitoring indicators such as sales performance, production, and so on, they can be more proactive in stemming resignations and turnover.
If employee retention is a big concern to your business, consider investing in incentive and compensation management solutions in order to transform your organization into a more dynamic and responsive environment that is conducive to employee excellence.
These high-tech solutions may seem costly at the start, but investing in such systems will definitely pay off in the long run versus costs of constant hiring and training of new employees.