The pandemic. The Great Resignation. Remote work.
These are three reasons employers are doing everything they can to stop the hemorrhaging and get their employees to stay with their companies. Employee turnover is costing businesses big bucks in terms of recruiting costs for finding replacements, training those replacements, lost productivity, more errors by new employees, and decreased customer satisfaction.
Unfortunately, there’s more bad news on the horizon for employers. According to Robert Half’s Job Optimism Survey:
- 41% of workers plan to look for a new job in the next six months, mainly for a salary boost, better benefits and perks, and the ability to work remotely.
- 28% of employees would quit without another job lined up.
- 54% of professionals are interested in fully remote positions at companies based in a different city or state.
Thanks to remote work, companies are not only facing competition from local companies, but also from brands across the U.S.
- Reasons why employees leave
- Best employee retention strategies
- The Employee Retention Tax Credit
- Good employee retention benefits everyone
Through the use of exit interviews, Robert Half has also uncovered the primary reasons workers are heading towards the exits:
- Inadequate salary (in Half’s Job Optimism Survey, 65% of workers said a salary boost is the main reason they’re seeking a new job.)
- A benefits package and other perks that aren’t competitive
- Feeling overworked and/or unsupported
- Limited career advancement
- A need for better work-life balance
- Lack of recognition
- Unhappiness with management
- Concerns about the company’s direction or financial health
- Dissatisfaction with the company culture
- The desire to make a change
- More compelling job opportunities at other companies
In most cases, departing employees cited more than one of these reasons for quitting their job.
[ Related: How to deal with job burnout ]
Employee turnover is a fact of life, and in some cases, it’s healthy for the employer and the employee. Sometimes people are hired for jobs they’re not well-suited for and leave the company voluntarily or are mercifully terminated. Employees also retire, and some chase the dollar and end up working for the highest bidder (until the next big offer comes along).
What employers don’t want to happen is to lose their top talent. The question is, “How can they do that?”
Here are six ways companies can dramatically improve employee retention:
1. Pay people better
Since two-thirds of employees are willing to walk for more money, employers need to evaluate salaries regularly and adjust as needed. If money is tight, companies can pay larger performance bonuses and higher commissions to employees and salespeople who are significantly contributing to the bottom line.
2. Provide creative benefits & perks
At a minimum, companies need to provide traditional employee benefits like:
- Health and dental insurance
- Life insurance
- Disability insurance
- Supplemental insurance
- Paid sick leave
- Paid holidays and vacation days
To improve retention and keep employees longer and happier, companies are always looking for ways to offer more creative benefits.
- Relaxation rooms
- Letting employees bring their dogs to work
- Free memberships (not your typical gym membership) for warehouse clubs (Costco, Sam’s Club, etc.) or a monthly car wash pass
- On-site services like haircuts, oil changes, dry cleaner pick up and drop off
- Free snacks, which can be healthy (granola bars) or not as healthy (Snicker’s bars)
- Student loan repayment to help employees drowning in student loan debt that they’re afraid of paying for the rest of their lives
- Commuter benefits (free parking, fuel credits, reimbursement for tolls)
3. Embrace remote & hybrid work
Like it or not, many workers are digging their heels in and are only considering remote work opportunities (more than half, according to Half). If management isn’t willing to do this, compromising by implementing hybrid work schedules split between office-time and remote work time will help reduce turnover.
[ Study: To remain remote, employees ready to give up benefits ]
4. Allow flexible hours
In addition to letting employees work where they want to, companies will improve retention by allowing their people to work when they want to. Employees feel their employer trusts them more if they’re allowed to work when they think they’ll be the most productive (morning people vs. night owls).
5. Provide better wellness offerings
In addition to the standard physical wellness offerings (yoga classes and the aforementioned gym membership), employees are clamoring for mental health offerings. They’ve realized that stress and a poor work/life balance have caused unhealthy stress levels, resulting in unhappiness, depression, and anxiety.
Current and prospective employees want an employee assistance program (EAP), but they also want more, such as anti-stigma/awareness campaigns, on-site counseling programs for them and their families, meditation rooms, and mindfulness training.
A financial wellness program is also a great retention tool. Teaching employees about budgeting, reducing their taxes, saving for retirement, and eliminating debt leads to less-stressed, happier workers who are more productive than those with money problems.
6. Create a culture of celebrating others
One of the biggest complaints employees leaving a company express during exit interviews is not being appreciated by their manager and company. This is exacerbated by remote workers not having as much personal contact with their managers.
In addition to formal rewards programs like gifts, plaques, and certificates recognizing an employee’s years of service, employers and managers can and should do small things, like feature top performers in the company newsletter and cite specific accomplishments during performance reviews.
If you’re a small-medium sized business that kept employees on the payroll from March 13, 2020, through September 30, 2021, you may be eligible for the Employee Retention Tax Credit (ERTC), which is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act:
- The 2020 ERC Program is a refundable tax credit of 50% of up to $10,000 in wages paid per employee from 3/12/20-12/31/20 by an eligible employer.
- The 2021 ERC Program has increased to 70% of up to $10,000 in wages paid per employee per quarter for the first three quarters of 2021.
The determination of eligibility is based on 2019 records. Businesses with 500 or fewer employees during 2019 may qualify. To be eligible, gross receipts in 2020 or 2021 must be at least 20% lower per quarter than the same quarter in 2019.
Businesses with 100 or fewer full-time employees may qualify for a 100% employee wage credit. This applies whether the company is open for business or subject to a shutdown order.
Businesses with over 100 employees qualify if they pay employee wages when not providing services due to COVID-19 circumstances.
Even though it’s 2022, it’s still not too late for employers to apply for this tax credit.
It’s apparent that employers save money and increase profits by keeping turnover to a minimum.
But, employees also benefit when their company makes an effort to keep them on the payroll. They don’t have to go through the stress of changing jobs, and they feel much more appreciated when their employer makes changes intentionally designed to reward and retain good employees.
Finally, good retention makes for happier employees who do better quality work. This translates to more satisfied customers who will continue to do business with the company and keep it growing.
It’s a true win-win-win.
The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.