5 Creative Employee Retention Strategies
Retaining top talent is critical to your company's growth. Here are five ways to keep employees happy.
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Employee turnover is expensive: Estimates show that losing an employee costs a company 1.5-2x an employee’s salary. Retaining employees is critical to a company’s success, so it makes sense that HR teams spend a lot of time thinking about employee retention and how to keep employees happy and engaged.
When companies are formulating employee retention strategies, they often consider salary increases or bonuses because these are known to have a great impact on employee engagement and retention. While it’s true that fair and competitive compensation is a huge factor in employee retention, it’s not the only one.
Not every company struggling with turnover will have the extra funds to offer large salary increases, but other factors such as strong benefits, professional development opportunities, and an inclusive company culture are major draws for an employee.
Below we’ll share five employee retention strategies that can help your company stem turnover and retain top talent.
Strong employee benefits are crucial for employee retention. According to a Glassdoor survey, 80% of employees would prefer additional benefits over a pay increase. The right employee benefits can have a bigger impact on an employee’s quality of life than a pay bump of a few thousand dollars, so it makes sense that employees are prioritizing them when considering the value of their total compensation.
But not all employee benefits are created equal. Most benefits programs don’t provide employees with much flexibility in how they can use their benefits. For example, companies sometimes offer wellness programs that limit employees to certain vendors. This decreases the value of the company’s wellness program because those vendors may not fit every employee’s individual needs and preferences.
More companies are choosing to provide flexible benefits accounts such as lifestyle spending accounts (LSAs) for this reason. Benefits programs that prioritize choice and personalization are more valuable for employees and are more effective in helping them take care of their wellness. These programs stand out from one-size-fits-all benefits programs that treat every employee as though they have the same priorities, making them a strong employee retention strategy.
Family planning benefits are another powerful tool for retaining top talent at your organization. Employees today are seeking organizations that champion DEI, or diversity, equity, and inclusion. Providing family formation benefits to everyone regardless of gender, sexual orientation, and marital status is one of the best ways to live out those values. A recent Mercer survey found that 40% of respondents offered fertility benefits to support DEI efforts.
Michelle Kerr Stenzel, CHRO at Turnberry Solutions, said that she considers company values like inclusion when updating their benefits package: “One of our five core values is inclusion, so we look at our benefits from that lens of, ‘Are our benefits inclusive for all the ways that families come to be? Are our benefits inclusive for all family structures or couple structures?’ We took a hard look at our benefits a couple of years ago with that in mind.”
Recent surveys show that 77% of Millennial and Gen Z respondents said they would stay at a company if it offered fertility benefits, and a large majority of them said they would even consider changing jobs for better benefits. There are a variety of ways to offer family formation assistance. Flexible spending accounts (FSAs) and health savings accounts (HSAs) can help pay for eligible items and offset some of the costs for items not covered by insurance. Commonly covered benefits include ovulation kits, fertility apps, IUI or IVF, vitamins, and acupuncture.
Employers can also build a lifestyle spending account program to get creative here. Funds can be allocated toward adoption, mental health allowances, and even items that help on a day-to-day basis during a stressful time such as grocery and meal delivery.
Professional development opportunities are a win-win for companies and employees. Employees who have the chance to invest in more education and learning opportunities are often highly engaged and productive at work. Flexibility is key here because employees may have different learning styles or coursework preferences.
An employee development program can stand alone or be a pillar of an LSA. Platforms like Benepass that allow companies to pre-fund benefits accounts and increase flexibility with a card-first approach increase engagement by eliminating the stressful reimbursement process. Employees are far less likely to pursue people development if they will need to front any costs out of pocket.
Recognition is a must for any company that wants to retain its top talent. Organizations with formal recognition programs have 31% less voluntary turnover than organizations without them. Happy employees are also more likely to act as advocates for your organization adding a positive element to recruitment efforts as well.
Employees want to feel like their contributions are appreciated and recognized, but many employee recognition programs fall short.
To be effective, your program should reward employees on a consistent basis. There should be clarity around how to give recognition, which behaviors are rewarded, and how employees will be rewarded. Employee recognition should be timely, specific, and inclusive. It should also be tied to company values or objectives for maximum impact.
You should also consider the types of rewards that employees will be most valuable to employees. Spot bonuses and gift cards are nice, but they might not be the most effective way to reward employees.
Rather than giving employees gift cards that may not even use, cyber hygiene platform Automox created an Automox Perks program that allows managers to reward employees by adding funds to a flexible account, which they can spend on anything they like. They also established a peer-nominated $200 monthly culture award through Benepass that awards employees who display the five company values.
“Employees prefer to have money added to Benepass because it's permission to spend it on something that isn't utilities or groceries,” said Elspeth Arnold, Manager of People Experience. “They can spend it on something for themselves.”
Strong relationships are another cornerstone of employee retention. Employees who feel connected to their colleagues are more likely to enjoy their work and feel a sense of belonging in the workplace. Healthy coworker relationships strengthen company culture and designate your company as an employer of choice.
More companies are getting creative with how they encourage these relationships. For example, Automox also used Benepass to create an AX Connect program designed to foster professional and social connections among employees. Through a “random coffee” Slack channel, employees are paired for a physical or virtual coffee date they can pay for with Benepass funds.
“We added the AX Connect as just a way to say, have coffee on us. We don't care what they use it for, that's the thing about these Benepass funds. We trust employees to use them the way that they're intended,” Elspeth said.
Public relations software Muck Rack also uses Benepass to foster employee connection. The company offers employees a Muck Meals stipend that employees can use every two weeks to get a meal or coffee with a coworker virtually or in person.
“We’re seeing photos of people connecting, collaborating, and bonding shared in real time on Slack,” said Erica Raphael, VP of People. “It’s a simple way to compel the team to take the time to connect and create those relationships that come naturally from working closely with a team. It’s been such a treat to watch friendships grow.”
Muck Rack recently held a company-wide art project event. The event host sent kits to everyone in the U.S. but was unable to ship to Europe. Instead, Muck Rack worked with Benepass to create a supply list so that employees in Europe could use a special Benepass perk to purchase the same supplies and participate in the event.
“Benepass has opened the door for us to come up with creative solutions for more global events,” Erica said. The company recently hosted a virtual holiday party and everyone received a stipend on their Benepass cards to purchase a meal to enjoy together during their annual Zoom celebration.
Employees today are looking at their employers far more holistically. While fair compensation is important to them, flexibility, great benefits, and creative perks go a long way in improving retention.