In this new age of frozen pensions, higher insurance premiums and downsizing, employee retention incentives might appear to be an additional line item a company just can't afford. On the contrary, as research has shown that companies with an average of 10 percent or more in employee turnover annually pay upwards of $50,000 to replace each lost employee. So the perspective on cost shifts when the value of employee retention incentives is considered.
Incentives Won't Fix a Bad Company
Implementing good, productive management; maintaining a balanced workload for all employees; allowing for enhanced skill and knowledge opportunities; and adding to an employee's motivation to provide quality work are the fundamentals required for an attractive workplace.
Owners and operators establish the tone and culture of a company, and one bad manager or a firebrand owner can result in the loss of great employees. The easiest formula to remember is that employees can and will take their skills elsewhere, and this will directly affect the success of your company or department. Thus, there has to be a complete psychological buy-in of all members of management to retain employees in the best ways possible.
The Value of Honest Communication and Recognition
It's simple: we do not live in the age of the cartoon "Jetsons," where robots and machines live and work with us. Human beings are a needy lot, but at least we all generally share the same needs.
Studies have continuously proven that positive, sincere recognition and direct communication generates a feeling of commitment and belonging, which encourages employee retention.
And doesn't cost a thing.
Companies that clearly communicate to and involve all employees, not just managers, in key decisions, upcoming changes, idea generation and outcomes have stronger employee loyalty. No one likes to feel like a rusty cog. The night janitor may have the perfect solution to an "upper level" problem; but without the encouragement of input, the company loses both a potential winning idea and eventually, a good employee capable of better contributions. Finding out about major company shifts through the grapevine rather than direct communication has an intense effect on morale and productivity.
Recognition of effort carries considerable weight, as everyone likes to feel appreciated and that his or her contributions matter. From the highest executive to the clerk in the mail room, even something as simple as "thank you for staying late - your extra effort made a great difference to the timeline" or "I've noticed you're always punctual - I like that about you" demonstrates a caring for the individual doing the work.
Ideas for Employee Retention Incentives
First and foremost, ask employees what's attractive to them. Be open to all ideas.
The size, culture and objectives of a company dictate how employee retention incentives are structured. Picnic tables in a grassy knoll and a basketball hoop might work well for the three shifts of a door manufacturer, but for a company with an external sales force that communicates primarily through the company's Intranet, it doesn't make sense.
- Flexible time. More companies are recognizing the importance of flextime and how it complements their employees' busy lifestyles. Depending on business operations and customer service needs, flextime is easy to implement, but requires clear communication by management to make sure requirements are met.
- PTO plans. Personal time options allow employees to take time off for whatever reason, be it a sick child, a vacation day or a "mental health" day, without the needless tallying of what hours come from what bank of time. It also demonstrates an understanding of different employees' needs. This plan helps companies with human resource management as well.
- Incremental vesting options. Companies that provide monetary rewards over periods of service encourage commitment. Deferred management bonuses or employee stock options are just a couple of plans that can be part of a staggered award system based on years of service.
- Performance-related compensation. Otherwise known as "distributing the wealth." Successful projects, achieved objectives, maintaining safety standards: employees will appreciate being rewarded extra compensation for their contributions to these efforts.
- Lifestyle perks. Subsidized daycare and parking, discounts at merchants and travel centers, on-site wellness centers, $2 lunches at the company cafeteria - these and many other similar options reduce an employee's bottom line and communicate a company's caring philosophy.
- Seminars and workshops. A plus to the employee and the company, as the employee returns with a fresh outside perspective and additional skills to apply to the company's objectives.
- Tuition reimbursement. This incentive demonstrates a commitment to assisting the employee in becoming a better person.
Company culture additives
Little things, like fun and appreciation, can really define a company's culture. Here are a handful of ideas that may either work within your company or start a brainstorming session on what will be more appropriate.
- Company-provided lunch on Friday
- Free tickets to cultural and sporting events
- Scheduled "playtime"
- Free product distribution
- Time off for volunteer work
Life at work does not have to be a Dilbert cartoon, full of incompetent and uncaring managers and co-workers. If you're in a position to take action, you'll keep the best employees and the company will experience great success.