How long does the average employee stay with your company? Do some departments fare better than others when it comes to employee retention?
Now is the perfect moment to discuss the employee experience and how it relates to retention.
Perhaps you’re already monitoring retention in some way to reduce business costs and keep productivity high? Today, we’re going to discuss how the experience and perceptions of your employees can impact retention and what you can do to sway those experiences in a favourable direction.
What is employee experience, and why is it important?
Employee experience includes everything a worker encounters and perceives on a job, starting with the initial interview and onboarding process. The experience continues to evolve until an employee stops working with the company.
It’s a very personal journey because each employee will have their own thoughts, feelings, and perspectives on what they encounter at each phase of their employment. That doesn’t mean you can’t have a significant impact on those experiences as the employer, by taking a business-wide approach.
While most people will have at least one area of their work life that they don’t particularly enjoy, you want to offer so much value and support that the overall experience for each employee is positive.
How do you take control of the experience your employees have with your company? It comes down to investing in a solid employee value proposition (EVP).
Your EVP is a collection of value enhancements that you offer employees. According to data collected by Gartner from more than 40,000 employees in 40 different countries, there are two things you can accomplish by improving your EVP:
- Decrease employee turnover by close to 70%
- Increase commitment from new hires by close to 30%
To determine your EVP, answer the following question:
What do we offer employees in exchange for their talent, time, and contribution to our goals?
Your EVP may include a variety of factors that top talent in your field will find attractive, including but not limited to:
- Financial Benefits – competitive compensation packages, bonuses, stock options, etc.
- Health Benefits – competitive insurance policies, gym or fitness club memberships, paid leave, etc.
- Workplace Culture – positive communication, sense of unity as a group, support from management, and resources to make jobs easier
- Advancement Opportunities – company-sponsored training, tuition reimbursement, mentoring, hire-from-within policies, etc.
The most impactful components of your EVP are related to workplace culture. The more you ensure open communication throughout the company and ensure everyone is treated with respect and feels their voice is heard, the more positive employees are likely to view their experiences.
What is employee retention, and why is it important?
Employee retention refers to keeping employees with the company for as long as possible. You can also think of it as reducing employee turnover, which is the opposite of retention. Retention is often referred to as a numerical rate calculated with the following process:
- Subtract the total number of employees that left your company within a given period from the total number of employees currently with the company
- Multiply the number you just calculated by 100
Employee retention rates are often calculated annually, but you may monitor yours quarterly or even monthly if you want to improve retention. Higher retention rates are always ideal because it means you spend less money and time recruiting new talent. The goal is to maintain employees rather than constantly replace them.
The link between retention, experience, and your bottom line
Are you starting to see the connection between your employee retention rate and overall employee experience? It comes down to a predictable cycle that goes something like this:
- The more value you offer employees, the more likely they are to have a positive experience working for your company
- The more positive the experience, the more likely employees are to feel loyal to your company, sticking with their jobs for years to come
- The longer employees stay in their positions or advance within the company, the higher your retention rates
- The higher your retention rates, the less time and money you may spend finding and onboarding new employees
Employee retention is more important now that employees around the world are leaving their positions in record numbers. From October to December 2021, the vacancy ratio in the UK reached a record high of 4.1 per 100 jobs. One interesting study conducted by economists found that happy employees are about 12% more productive than unhappy employees. Other research has shown that a happy workforce can improve sales by 37% and productivity by slightly more than 30%.
How do you keep your employees happy to enjoy those benefits? It starts with strengthening the culture and workplace environment and then extends to paying employees competitive salaries and adding desirable benefits packages. Simple things like opportunities to advance and learn new skills or perceiving management as supportive and inclusive can go a long way to seeing more smiles in the workplace.
The role of tech in employee experience and retention
Technology is touching every aspect of the work environment, and that includes employee well-being. The emotional and mental state of your employees will have a direct impact on their performance and productivity as well as their perception of work experiences. According to the Future of Mental Health Report Survey, mental health support for employees improved productivity by 67%.
Even more important, close to 80% of employees responding to that survey said that access to quality mental health resources would make them more likely to stay with an employer. That’s a powerful statement for adding more mental health and well-being support to your employee value proposition. You can do that easily and affordably through technology, and it will have a positive impact on your overall employee experience.
As we already learned, those experiences have a direct impact on employee retention, which impacts everything from your budget to productivity and employee morale.
Your next steps to improving employee retention through a better employee experience
Here at Kind Mind, we have been working hard on some next steps for you – to help you turn a high churn rate into an improved retention rate. In doing that we have some written guides for you (see below) that we think will be your best starting point. These are
- How to design the best employee experience
- How to add more employee-focused touchpoints to your human resources flow
- And finally how to look at wellness in relation to employee experience