10 No Cost Ways to Increase Employee Retention

Here are 10 quick and easy ways to improve employee engagement and increase employee retention. Though these tasks take time, and time is money, there is very little to no implementation costs.

  1. Involve the team in discussions and decisions affecting their position
  2. Get feedback from your employees on what they like and do more of it
  3. Hold daily 5-minute kick-off or scrum meetings
  4. Create more of a positive, fun and grateful culture
  5. Learn how to properly handle conflict and not be emotionally charged
  6. Encourage feedback and give it in a timely and considerate manner
  7. Create a respectful workplace, free of gossip, bullying and disrespect
  8.  Provide more praises than criticism; praise twice for every criticism
  9.  Listen to your team, they want to be heard
  10.  Perform exit and stay interviews, know why people are leaving and staying

Measuring ROI in Your HR Investments

How do you measure ROI on time and money spent on human resources and cultural?  For business people this can be very difficult and for most they see no ROI. Too many business owners view human resources as a known cost with an unknown return. Not knowing the financial impact as a measured ROI means most business owners tend to under invest in HR.

Recruiting software giant Greenhouse has come up with a method to measure HR initiatives called Employee Lifetime Value (ELTV). As illustrated in the chart below, ELTV measures the value an employee brings to an organization, from his or her first day to the last day.

As you can see when an employee is hired, they have a negative output, because time and money is spent to recruit and hire. As onboarding starts and continues, employees eventually move into a positive output. For some companies this can happen very slowly. As you continue to grow, train and develop that employee their output increases. Eventually the employee may decide its time to move on and output will decrease until finally they leave.

ELTV has four areas of input that will either increase or decrease an employee’s lifetime value. Hiring, Onboarding, Developing and Culture. An increase in output does not rely solely on how long an employee works for you. Effective processes for those four areas will improve ELTV output. The better Recruitment and Onboarding you have the earlier you will achieve a positive output. The better Development and Culture process you have the longer you will have a positive output.

Maia Josebachvili from Greenhouse shared some research from a case study on sales people. The focus was on sales people as it’s easier to calculate revenue with that role, but it applies to any position or employee.

In the case study there are two breakdowns, companies who invest very little or have average HR practices versus companies who invest in and create above average HR practises. Below are the results that show higher investment in HR leads to an increased ELTV output.

  • Hiring – The salesperson is a better initial hire; they outsell peers by 20%
  • Onboarding – A better onboarding program decreases the sale person ramp time by 30%
  • Development – Better management and development practices improve the salesperson’s performance by 20% in a year
  • Culture – Better culture and management practices add a year to the salesperson’s tenure.

Josebachvili said these numbers are conservative and are probably a lot hirer. In one case, a company investing in HR had salespeople making an extra $1.3 million over three years. A small monthly investment in practises such as recruiting, onboard and improving culture can make a big difference in revenue. See the chart below to compare

In looking at these measurements you can get a better sense of ROI. Those unknown returns now have a measurable return. Investing an extra $1,000 a month in HR can bring a return that is 10, 20 or even 30 times higher.

The key is start measuring and start investing to see what works. Start small but focus on those four areas Hiring, Onboarding, Development and Culture. Start measuring areas such as; average employee life cycle, revenue, employee offer acceptance, etc. Investment is essential for success just make sure you are measuring your success.

The Basics on Headcount Planning

Headcount planning is a strategic talent management exercise. It ensures organizations have the right people, the right skills, in the right roles. The process usually looks at reviewing your talent, hiring targets, succession plans, promotions and training.

A successful headcount planning process looks at internal and external changes and aligns talent strategies with organizational strategies and goals. You need to focus on

  • Identifying skills that the current workforce lacks.
  • Focus recruiting on the right candidates with the skills you need now and in the future.
  • Identify and mentor employees who can fill critical skills gaps.
  • Identify a budget for hiring new staff and developing employees.

Here are four steps to get started

1. Identify Your Business Challenges

Look at what you need to focus on as a company. Here are a few sample questions:

  • What is our goal for the year?
  • Are there challenges for your business and/or industry?
  • What opportunities do we have as an organization?

The more you understand and define your business goals, the more successful your headcount planning process will be.

2. Establish Metrics

You need to evaluate your existing talent and figure out your talent needs. Successful headcount plans must have defined metrics to make talent changes and plan accordingly. A few suggested metrics are performance ratings, position requirements, employee skill sets, retirement eligibility.

3. Evaluate Your Data

Now that you have the metrics defined how do you use them? Here are some questions to ask:

  • Which roles are critical now and which ones will be in the future?
  • Which positions (if any) can we do without to maximize the ROI of our workforce?
  • Where are we having problems with attrition and what can we do about it?
  • Are we growing or hiring succession-eligible employees?

4. Plan for the Year

Your headcount plan should be a living document and therefore you should be reaching out for insights from your departmental and business line leaders to evaluate needs.

Headcount planning can be very successful when planning and budgeting for talent needs. It takes planning into consideration versus always being reactive to employee changes. It looks at training, transitions, hiring and retiring and creates a road map for success while taking the guessing game out of workforce planning.

Ways to Improve Employee Retention

What are you doing to keep all the amazing employees you hired? Employee retention is like gardening, consistent nurturing is key for survival. You need to ensure you are caring for your employees if you want them to stay. Here are a few tips.

  • Onboarding and orientation — This starts from day one and can last for weeks or even months. Proper planning and welcoming the new employee is important so ensure you provide a celebratory warm welcome. An orientation on the job and culture is key so the new employee can learn how they fit in, contribute and succeed.
  • Buddy programs — As part of the orientation process a new employee should have a paired employee buddy. Seasoned employees can provide insight, guidance, friendship and be a great sounding board.
  • Recognition and rewards — Make sure you put a plan in place to ensure employees feel appreciated. Reward systems are great but a simple thank you can also go a long way.
  • Flexible work and/or work-life balance — Ensure you are not working your employees to the point of exit. There needs to balance, so ensure your employees work hours are healthy. Encourage time off and allow some flexibility. Life is demanding and everyone needs time to manage. Flexibility is no longer a perk or a nice feature, it’s a must.
  • Opportunities for training and development — Employees who have opportunities to grow and develop are less likely to leave. Putting together employee development plans with a minimum 6-month review will lead to employee growth and retention.
  • Compensation & Benefits Strategy — It’s a no brainer that an employee will consider crossing the road for a new job if they can get more. A proper strategy and focus on your total rewards ensures you remain competitive. Pay is not everything but it’s still a factor. Also don’t just focus on a plan that attracts an employee, ensure you have proper yearly reviews to retain employees as they grow.
  • Communication — Employees often feel they don’t get enough communication. Proper communication and meetings are essential. Employees also need feedback, an opportunity to be heard and for you to be open and honest. 
  • Teamwork — Proper teamwork, relationships and celebrations increase retention. When employees work together they feel more included. Employees who are part of a team don’t want to let each other down and loyalty is a part of it.

In the end you need an employee retention strategy but you can’t just create it any be done. Stay current and ensure to review your strategy at least once a year. There is an existing talent war that has gone nuclear in the last five to ten years. It’s one thing to attract an employee but retention is even more important.