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What is employee retention?

photo of employees working together

Table of Contents

Employee retention is the process of attracting and keeping employees; it is vital to the survival of any business. Companies that focus on employee retention have workers who perform better, have higher morale, and produce better work. Such companies also experience a reduction in their employee turnover rate.

Why does employee retention matter?

Employee retention has always mattered, but COVID has certainly changed the employment landscape. Because of the pandemic, retention has become even more important in the retail, grocery, and restaurant industries, where on-site workers are necessary to keep the business afloat. Sometimes, this means asking workers to take on new roles, such as asking FOH staff to deliver orders instead. This is different from other industries, where businesses are being forced to let employees go.

In order to retain workers, larger companies are adopting new policies and procedures, increasing wages, paying out bonuses, and extending sick and paid leave. Smaller companies, and those with fewer resources, may need to seek new and innovative ways to reduce turnover rates.

How can you improve employee retention?

There are many ways you can help retain employees. Some focus on behavior, such as communication and support, while others focus on material or financial rewards, such as fringe benefits. We discuss several options below. Most likely, you’ll want to settle on a mix that works well within your company budget and culture.

Hire the Right Candidates

Regardless of what route you take, it all starts with the hiring process. When interviewing job candidates, you should identify the values and qualities you want to see in your staff. Recruiting people with those qualities, and who fit well within your work culture, is the first step in making it easy for them to become long-term employees. If they’re not a good fit to start, they’re probably not likely to stay.

Tip: If you’re in the food service business, check out our article on restaurant interview questions.

Provide Professional Development and Career Advancement Opportunities

Investing in your employees’ professional development is always a good strategy. When you provide training opportunities, employees feel valued. They also feel like they have more to gain by sticking around. Therefore, you should continue to seek new ways to help your employees grow professionally. Or else risk losing them.

Giving employees an opportunity to advance their career also makes them feel valued. It gives them a chance to contribute to the success of the company, as well. When you groom your employees for advancement, you help them to acquire the knowledge and skills necessary to perform and move to the next level. It’s not only easier and more affordable than hiring outside the company but also causes less friction among existing staff.

Offer Fringe Benefits and Other Perks

Keep employees happy by offering competitive pay and fringe benefits. Benefits might include affordable health insurance, flexible work schedules, paid leave, stock options, and financial awards for employees who exceed performance goals.

Investing in employees’ physical and mental well-being not only protects your bottom line but shows your workforce that you care. Many agencies have an Employee Assistance Program to help employees and their families through a crisis. Other programs you might consider are: physical fitness incentives, mindfulness groups, and financial counseling.

Providing employees with small perks, such as paid time off for volunteering (VTO), catered lunches, free snacks, and coffee can help, too. These not only make your company stand out but can also improve employee morale. Can’t afford bigger perks on your own? Foster partnerships to offer discounts on high-ticket items, smart phones, and recreational activities.

Raise Employee Morale with Good Communication, Engagement and Feedback

Another way to improve employee morale and retain employees is to have good communication. Creating open, team-based communication between employees and management can foster a sense of community and a shared purpose. Of being on the same team. Conducting regular staff meetings where employees can ask questions and share their ideas helps them feel valued and that management hears them.

Employees feel heard when management has an open-door policy that allows anyone to voice their opinions or air grievances. Instead of filing a formal grievance, sometimes employees just want to know that someone understands how they feel. Ensure you make time to communicate with staff personally to let them know you care about what’s happening in their lives.

Engage employees by keeping them in the loop and taking time to get their perspectives. Engaged employees take pride in doing a job well done and feel valued for their contributions. They enjoy their job, and employers usually count them among the top talent in the organization. Employees feel accepted when they are highly engaged and less likely to quit, too.

Review Employee Performance and Recognize Hard Work

Supervisors should meet with employees throughout the year to check on their job satisfaction. Never pass up an opportunity to discuss and review the employee’s short- and long-term goals and talk about their future with the company. If an employee just isn’t feeling fulfilled by their current role, or seeks more challenging work, it’s a great time to chat about options.

And when an employee does something beyond the call of duty, management should recognize their efforts. Find ways to let employees know how much you appreciate their hard work. You don’t need to hold a huge ceremony or give out expensive gifts, either. A simple thank you email or some kudos during a weekly meeting can help make an employee feel included and valued.

Encourage a Company Culture Based on Teamwork and Work-Life Balance

When people work together as a team, they can accomplish far more than what one individual can do. Fostering a collaborative culture allows everyone to contribute to the mission’s overall success. And to celebrate in the accomplishments, too.

Although there may be times when employees must work overtime or go the extra mile, you should be careful to avoid burn out and exhaustion. People need time to rest and recharge. Expecting employees to be on call continuously is not conducive to a healthy work-life balance. Managers must understand their employees have lives outside of work, especially during COVID.

Retain Employees with Great Supervision

This one might seem like a no brainer, but it’s as important as hiring the right candidates to start. Having an unfair, biased, or untrustworthy boss is why many employees leave their job for a better one. On the other hand, having great supervisors is one of the best ways to improve employee retention. What makes a great boss depends on the industry and employee, but in general, you want reliable leaders who actively support the team. You’ll find that employees who respect their supervisors will take efforts to solve problems instead of creating them.

Improving Employee Retention during COVID-19 and Beyond

The COVID-19 pandemic has created new challenges, especially in the retail, grocery, and restaurant industries. Having employees work from home is not an option for many employers. Therefore, following some of the employee retention strategies listed in this post will help keep employees on the job. There’s a lot to keep up with, though.

One way to keep up with all the changes is to conduct an annual or biannual review of your company’s employee retention strategies. It helps to remain current on competitive salaries and benefits offered by competing businesses, even when times are tough.

Take Advantage of the Paycheck Protection Program

Another way employers can cope is with the Paycheck Protection Program. With COVID-19, it has become difficult for many companies to remain in business. To stay open, for example, many restaurants have had to pivot to curbside services or operate as ghost kitchens. The Paycheck Protection Program helps small businesses keep as many people employed as possible. Under this program, you may be eligible to receive forgivable loans to help cover payroll expenses provided that you maintain employee and compensation levels.

Invest in a Workforce Management System

Another way to keep employees happy is to make it easy for them to request time off and swap shifts with coworkers, both of which are easy to do with the right WFM system. TimeForge offers labor management solutions for businesses in the retail, grocery, and restaurant industries. Contact us today or request a demo to find out how our software can help you optimize your labor and retain your best talent.

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