Several studies among Danish managers have shown that employee retention is one of the most important duties of managerial teams. Part of the reason for this is that past recessions have been replaced by financial upturns, and that the large generations of middle-aged employees slowly are succeeded by the smaller and younger generations.
For managers, this means that it will become difficult to hire the needed labour force in the future as the imbalance between supply and demand continues to grow. In addition, more industries lack specialists, and they suffer greatly financially in the cases where they lose a valued employee to the rival companies. It costs between 150 and 200% of an employee’s salary to replace him with someone new. So, there are plenty of reasons for focusing on the retention of employees.
Employee Retention: Create appealing terms of trade
Many companies rely on offering traditional perks such as higher salaries, company cars, big bonuses and employee discounts on haircuts, lunch deals and fitness memberships when trying to retain employees. But these traditional methods of retainment are not enough on their own.
Instead, the manager and the HR-department ought to encourage the employee to develop a strong affiliation to the company. The employee contributes with work effort, engagement and loyalty, while the company provides salary, development, challenges, a social network and perhaps even an identity through the job.
The manager needs to be acting instead of reacting for these terms of trade to succeed. Generally, the manager tends to react first by asking the employee what it will take to make him stay on. But it will typically be too late to try make amends after an employer has resigned. Even if the manager is able to convince the employee to stay, studies show that there is a 50% risk that he will leave the company within a year.
A manager should instead be proactive; he must establish the appealing terms of trade with the employee from the first interview, during onboarding and continue to maintain them through the retention points.
The correct way to construct the terms of trade depends on the company and the individual employee. The only way a manager can gain insight into what will retain the employees is to talk to them. These talks can be categorised as retention talks, motivation talks or simply staff development interviews.
How will Garuda help with employee retention?
Both Danish and American studies show that these talks and interviews help with employee retention, which is why they are an essential part of Garuda. The first step is personal profiles.
It will be far more useful to conduct individual interviews when you have familiarised yourself with the personal profiles of your employees and colleagues. You will learn what their strengths and limitations are, what motivates them, how they communicate and how they prefer to do their job.
All this is crucial when conducting an interview with the goal of keeping the employee motivated and content in their job.
Moreover, the retention or motivation talks based on personal profiles create an overview of the employee’s values – which must comply with the company values. Both personal and human values establish whether an employee feels that his job is of real value. This of course means that the values of the employee must resonate with that of the organisation.
Garuda helps businesses achieve healthier employee retention through personal profiles, motivation talks, staff development interviews and value-based management.