Five Strategies To Retain Your Employees
The biggest challenge CEOs face after hiring top talent is retaining them
By Bridgit A. Finley, PT, DPT
According to the U.S. Bureau of Labor Statistics, the unemployment rate is back to pre-pandemic levels—which is good news for employees and potentially rough water for employers trying to hang on to a steady workforce.
A record number of Americans are quitting their jobs, and this is especially true for low-wage workers. The Department of Labor reported that 4.4 million people quit their jobs in September 2021.1
Most businesses deploy extensive financial and human capital to hire the right employee. Employee turnover is extremely expensive and disruptive to the business. By some estimates, it can cost an employer double an employee’s salary to replace them when they quit, not to mention the stress, disrupted customer relationships, and loss of revenue.2
Salaries and benefits must be at market rate. What you offer your employees must be comparable to other businesses in your industry and in your region.3 Many small businesses pay a below-market salary and then offer a bonus, but a bonus program should not be used to make up for a low base salary. You are better off paying your employees the market rate, and then you can turn your focus to what really matters. Once your employees are compensated fairly, it is no longer about the money.
According to the Harvard Business Review, people leave their jobs because they don’t like their boss, don’t see opportunities for promotion or growth, or are offered a better gig (e.g., working closer to home). Trying to lure employees in a difficult job market by paying above market rate is a knee-jerk reaction and can put your business at risk by applying an expensive solution to the wrong problem. Instead, to retain your employees, consider the following five strategies.
1. SET EXPECTATIONS AND COMMUNICATE CLEARLY
Be clear about what you expect of the new hire and don’t sugarcoat aspects of the job. A good boss communicates clearly and often. Don’t make your employees guess about the expectations of the job. Most bosses don’t explicitly set expectations because they believe they are avoiding a conflict. What you need to realize is that your employees want to know the expectations of the job and setting expectations up front helps you avoid future conflicts.
2. INVEST IN THE BEGINNING AND BE INTENTIONAL ABOUT THE ONBOARDING PROCESS
Today’s employees require an effective onboarding program to successfully integrate them into the company’s workforce and culture. While an onboarding program isn’t new to business, it is severely neglected.
Make the first day and first week something that the new hire will remember and value. A poor onboarding experience for a new hire builds a foundation of negativity in the job and will increase the likelihood that they will quit. A good boss will spend time with their employees and invest in their onboarding and development. This should be a formal and structured process.
Employers lose 17% of their new hires within their first 90 days due to an ineffective onboarding. The basic elements of an effective onboarding consist of extensive training, feedback, check-ins, and hands-on support. Statistics released by UrbanBound state that a standard onboarding program increases retention by 50 percent.4 Most companies confuse an orientation with an onboarding program. An orientation is a single event, typically lasting up to one week, with a focus on paperwork and compliance. An onboarding program is a process integrating the new employee into their role and helping set them up for success in it by providing training and support and setting clear expectations.
The Harvard Business Review says it takes employees eight months to reach peak productivity, yet the average onboarding program lasts only three months.5 The most successful programs last up to one year.
3. BE AVAILABLE FOR YOUR EMPLOYEES
Evaluate how you are showing up at work. Do you show up at work and run around frantically and appear as if you are too busy for your employees? Employees want to be seen and have time to connect and receive feedback from the boss. This does not imply that you have no boundaries and are available 24/7. Let employees know when a good time is to talk and set aside “office hours” each week. It is also important to schedule one-on-one meetings with your direct reports at least monthly.
Keep the meetings sacred in your calendar and keep your agreements. If you need to reschedule a meeting, do so in advance, and do it as rarely as possible. This gives the message that other appointments are more important than the employee. Schedule the meetings for 30 to 45 minutes and ask them “What has your attention?” and “How can I support you?” This is also a time to offer support as well as feedback to help them improve at their job. Do not withhold feedback until the annual review; feedback should be provided with greater frequency than that. This is also a time to share your appreciation for the employee’s successes—the ideal ratio of appreciations to redirections is 5 to 1.
4. MAKE ADVANCEMENT POSSIBLE AND DISCUSS THEIR CAREER PATH
Whether it’s job advancement, promotion, or some form of professional development, people who feel like there is always a goal they can work for instead of a dead end are generally more motivated and engaged. Give employees opportunities for concrete success.
5. CONDUCT ANNUAL PERFORMANCE REVIEWS AND HAVE SALARY DISCUSSIONS
It’s important to understand what a performance review is and why it is important. This will give you the foundation you need to start using performance reviews more effectively in your organization. A performance review is a two-way, individualized conversation between a manager and an employee about performance impact, development, and growth.
Traditionally, performance reviews have occurred once a year and have focused on evaluating past performance. Modern performance reviews should happen quarterly or monthly during a one-on-one and should focus on improving future performance. Separate the performance review and the salary conversation. A salary discussion should occur annually. Once the salary discussion is complete, an employee is likely to be much more open to a discussion focused on their performance.
Most employees do not know when or if they will have an annual review. Let the employees know this is important to you and put the annual review in your calendar during the onboarding process. Many employees go years without receiving a raise or a review. The pitfall with this strategy is that the employee feels like they will need to leave the organization to get a bump in salary. Furthermore, some employees have no idea what they need to do to earn a raise. Discuss with the employee what they need to do to earn a raise. Be specific and use objective criteria as much as possible. An example would be to maintain an average of X patient visits per day. This is easy to measure and unarguable. Something that is more difficult to measure would be around “culture” or “being friendly.” These are important and should be discussed in the monthly one-to-one meeting, but not be used as a salary goal marker. If a person is not a culture fit, in many cases they will leave—this is one employee exit that would be a win.
STRATEGIZE FOR EMPLOYEE RETENTION NOW AND THE FUTURE
Nothing in this article is rocket science, and yet many businesses fail to implement the steps listed above. The difficult part is in the execution of the strategy. But if you don’t solve the issue of employee retention, your life and work with be exhausting, as you will never be able to stabilize your business. So now would be the time to pick one strategy and write out the actions you plan to take, along with a timeline to implement them into your business. Involve any other of your practice’s key stakeholders in this process and prepare for some amazing growth and opportunities.
1Associated Press. “For 2nd straight month, Americans quit jobs at a record pace.” POLITICO. https://www.politico.com/news/2021/11/12/for-2nd-straight-month-americans-quit-jobs-at-a-record-pace-521116. Published November 12, 2021.
2McFeely S, Wigert B. “This Fixable Problem Costs U.S. Businesses $1 Trillion.” GALLUP, https://www.gallup.com/workplace/247391/fixable-problem-costs-businesses-trillion.aspx. Published March 13, 2019.
3Harvard Business Review. “Why People Quit Their Jobs.” https://hbr.org/2016/09/why-people-quit-their-jobs. Published September 2016.
4Kurter HL. “10 Simple Ways To Improve Onboarding For Increased Retention.” https://www.forbes.com/sites/heidilynnekurter/2018/12/03/10-simple-ways-to-improve-onboarding-for-increased-retention/?sh=77ee1a34b35f. Published December 3, 2018.
5Ferrazzi K. “Technology Can Save Onboarding from Itself.” https://hbr.org/2015/03/technology-can-save-onboarding-from-itself. Published March 25, 2015.
Bridgit A. Finley, PT, DPT, is a PPS member, founder of Physical Therapy Central, and partner in Confluent Health. She can be reached at email@example.com.