Building On a Firm Foundation: How Effective Retention Strategies Set the Stage for Success

A recent article, written by Jaylene Cousins and posted on the MNP webpage, notes that, in the midst of rising costs and economic turbulence, the last thing business owners want to see is dwindling productivity and profitability because of high employee turnover. And yet, Statistics Canada found that 61%  of business owners say it will be harder to hire or retain staff in the coming year.

“Some degree of turnover may be inevitable, but many of the factors that contribute to strong employee retention are within your control,” control says Cousins.

She believes that “the largest barrier preventing most organizations from having better retention rates is an over-reliance on outdated methods and mindsets. Employees will stay if they have the proper incentives; business owners who choose to incentivize people the same way they did ten years ago, or even pre-COVID, will almost surely fall behind.”

Cousins adds that “each organization’s retention strategy must be unique to them, aligned with their culture and employee preferences. Consider how the following tools and incentives could be working for or against you.”

Salary: Salary is often the first thing that jumps to mind when you start thinking about staff retention, and given the current inflation rates, rightfully so. A study conducted in 2021 revealed that the majority of Canadians, particularly young people, said they would be inclined to leave their job and take the same role elsewhere, if they got a 10% raise.

Another study by Gallup in 2022 finds that it takes more than a 20% pay raise to lure most employees away from a manager who engages them, and almost nothing to poach most disengaged workers.

Benefits and rewards: Most employees understand that getting a small raise at another company doesn’t make financial sense if the benefits package is weaker. But benefits are more than just a financial commitment or a means of saving money for your employees. They hold a certain symbolic value as well. They show your people how well you understand their needs and wants — that you’re willing to “walk the walk” when it comes to their wellness and work-life integration.

Relationships: To work with a dysfunctional or toxic team for slightly higher pay is a trade-off many people, particularly young people, have decided they’re not willing to make. Relationships with coworkers and managers hold a lot of weight in an employee’s decision to stay or seek new pastures. The most common reason employees report for leaving companies is their relationship with their manager.

You can’t control whether your employees will become friends, but you can provide an environment that fosters team unity. Events, team building activities and even how you choose to run a meeting can help your people build positive relationships at work, and by extension drive better retention rates.

Flexibility: The flexibility to work full- or part-time from home took centre stage during the pandemic, Cousins says, “and for some businesses this remains a crucial part of their retention strategy. But it’s important to remember that flexibility means more than hybrid or remote work.”

Flexibility is closely linked with variety and autonomy: The option to learn a new skill on the job or get assigned more tasks you enjoy. On-site or not, your employees want to have a say in what their day-to-day job looks like.

Education, advancement and development: Employees who get proper recognition for their work are much more likely to stay. Recognition can take many forms, and your employees may not all want to be recognized the same way.

Opportunities for continuous education and advancement at your organization will often trump a salary raise somewhere else. Investing in the development of your people requires you to check in regularly and find out what their goals are, where they want to be in two or five years, and then actively work alongside them to help make that happen.

Social impact and purpose: Particularly for young people, your organization’s social consciousness will be a key factor that drives, or diminishes, employee loyalty. Cousins concludes that “your retention strategy is inseparable from your ESG strategy. If you’re perceived as not valuing inclusiveness, sustainability, or supporting vulnerable people in your community, retaining key employees becomes much more difficult.”