The national unemployment rate is at its lowest level since 2008; more people are quitting their jobs; and several major employers have announced that they are raising their minimum wages — all signs that the labor market is constricting. In response, many employers are adopting or revising their retention programs.
1. Implement nonmonetary retention programs first. Such programs could include greater employee recognition, casual dress codes, flexible hours and schedules, and expanded opportunities to work from home. More companies are also adopting pre- and post-hiring retention programs such as pre-employment testing, enhanced training, and exit interviews to departing workers.
2. Put raises at or near the bottom of the list when monetary retention programs are necessary to retain talent. Instead, try to use one-time cash bonuses that don’t add to the ongoing bottom line and/or tuition reimbursement programs. Or focus on improving overall compensation packages, with the cost of better benefits, such as more vacation or improved health care, as part of the deal.
3. Consider developmental coaching. In addition to providing coaching to senior-level executives, an increasing number of companies are giving coaching to high-potentials. Developmental coaching is an indicator to employees that their talents are valued and the company is committed to their career growth. Giving coaching to high-potentials enables them to become better managers. Senior-level executives are also more often receiving coaching in how to develop and mentor high potentials.
4. Explore career paths with employees, particularly for front-line workers. Relatively few employees decide to leave an employer only because they have issues with their pay. Career potential and opportunities for advancement are also usually part of the reason employees consider leaving. Many talented employees want recognition of the value they bring, a career path within the organization, and a plan for their future development. An effective retention method is for employees and their managers to mutually develop career paths with benchmarks to measure their progress and commensurate rewards.
5. Offer opportunities for long-time employees and subject experts to serve as mentors. Expand mentoring programs to accommodate various work schedules and needs, including short-term mentoring to fill skills gaps and virtual mentoring via webcam, email, telephone, and text messaging. Positioning certain employees as resident experts in their fields adds to their recognition and improves their retention. Pairing experienced employees with high-potential employees helps to quicken the development of tomorrow’s leaders, in addition to promoting retention.
6. Recognize which areas of the company are most likely to experience turnover and prepare to head it off. Employees who work directly with customers — such as sales and marketing, customer service, and front-line workers — are in demand today. Companies are hiring these types of workers as they ramp up staff due to increased business.
7. Identify which levels of employees are experiencing greatest turnover or demand and put extra effort into retaining them. High-potential employees and middle managers are generally in greater demand. The loss of these types of workers will have a big effect on the organization because high-potentials have been designated as future leaders and middle managers often supervise front-line employees.