If you’re struggling with employee retention at your organization, you’re not alone.
The Great Resignation has been ballooning turnover at countless companies for the past year, and it hasn’t lost momentum. Younger generations of workers are turning against traditional work in favor of the gig economy and the ability to forge their own path, which is a trend that’s throwing some companies into turnover purgatory.
The bad news is that poor employee retention can be crippling; not only does it harm productivity, culture, and engagement, but hiring new employees after departures can cost even more than the salaries of the workers you’re replacing. Simply put, many organizations can’t afford to be brought down by The Great Resignation.
The good news is that you can fix it. Adopting an employee retention policy will save you time, money, and team members down the line, resulting in quantifiable business success. Developing innovative employee retention strategies means more than leading a workplace-wide attitude shift, however. You can cure turnover more tangibly by using an employee retention software.
What is employee retention software?
“We have to find a way to afford [remote tech], because we’re bringing in enough revenue to do so, whether we have to make some different changes, we have to drop some things, we have to do other things, I think you should come in with the mindset, ‘Let’s not worry about money, we’ll figure out how to pay for it, if it’s the right solution.’”
That’s advice from Focus Technology’s CFO Chris Caprio on the importance of remote engagement tech for the modern workforce – and if a CFO is remarking that something’s essential enough to ignore the budget, you know it’s a big deal.
Employee retention software provides a solution that your team members can use to give and receive feedback, set and track goals, streamline communication, motivate one another, earn recognition, get to know and connect with their colleagues, and much more. It helps connect your remote, hybrid, on-site and deskless employees in one online community. No matter what, though, your employee retention software will boost engagement and promote your culture.
Employee engagement is the secret ingredient to retention. A Gallup study of about 24,000 businesses found that those from the bottom quartile of engagement scores experienced an average of 40% more turnover than those in the top quartile. As of August 2021, 65% of employed adults were looking for a new job, while 79% say they’re disengaged at work. That’s no coincidence.
Self-Assessment
Now the challenge is figuring out what sort of employee retention software you need, and why you need it. The first step is figuring out your company’s turnover rate and how urgently it needs to be addressed.
We’ll be calculating the turnover rate, which is more commonly used than the retention rate. There are two main differences between the two. Most importantly, turnover rates include new hires, while retention rates don’t. A lot of turnover is found in new hires who either quickly determine they’re not a good fit for the company, or quickly demonstrate they don’t belong at their position at all.
The other difference is in their typical categorization – turnover usually includes involuntary departures like retirement and terminations while retention usually doesn’t. When you’re looking at turnover, you want a plain and simple picture of who’s leaving the company and how often.
While the definition of turnover is straightforward, calculating the rate isn’t quite so easy. The formula is as follows:
Turnover Rate = # of Separations / Avg. # of Employees x 100
What may stand out to you is the “average # of employees” bit. Let me explain:
SHRM recommends counting the monthly turnover rate and adding each month up to come up with the annual rate. This is because it gives you a clearer picture of when turnover was highest and why – and, believe it or not, it makes the equation a bit easier.
Let’s say a company named NoQuits Inc had 20 separations and 16 new hires in 2021, going from 200 employees to 196. The average number of employees, month by month, is 198. If 6 employees happened to leave in July, that would be six separations/an average of 198 employees for a 3.3% turnover rate. That’s on the higher side for them, but they might have had a month with 1 departure, for a .5% turnover rate. Adding all these months up would result in a 9.6% turnover rate, which is excellent for NoQuits Inc.
Once you do the math for your company, you’ll get an accurate picture after referencing the national average turnover rates by industry. If your rates are higher than the average, you need to act as soon as possible.
Of course, retention software is still a great investment for those with low turnover!
Determining your Painpoints
While The Great Resignation is affecting everyone similarly, the root causes of low employee retention are different on a case-by-case basis. PWC’s 2021 pulse survey revealed that 41% of employees want better compensation, 34% are looking for a better work/life balance, 42% say their company culture has diminished, and 46% say they feel disconnected from their company.
Using large-scale studies like PWC’s as a guideline isn’t a bad idea, but you can get much more accurate results by asking your team members themselves. And hey – a great employee retention platform will have survey capabilities built right in!
Asking your workforce to anonymously answer questions about company culture, job satisfaction, and compensation will get you immediate answers regarding what needs to be fixed the most urgently, especially if the questions are left open-ended. Posting surveys on a platform that employees are already gladly using ensures a higher participation rate than when they’re pushed out through emails that may get missed or ignored altogether.
Company surveys can reveal almost any skeletons in a company’s closet, but there are a couple potential issues that require a bit more digging. Diversity issues could be more systematic than the average worker knows, which is why third-party DEIBA auditors exist to give organizations an evaluation to determine what needs amending. Additionally, you should keep an eye out for position-to-position and gender pay inequities that could exist that your employees wouldn’t be aware of – if they don’t commonly discuss their salaries, that is.
Your Features Shopping List
An employee retention platform needs features that not only measure and encourage engagement, but also fuels communication and connectivity. It should be a system that employees want to use regularly. The mistake most HR platforms make is relying on tools for things like benefits, payroll and task assigning that aim to manage performance, when they should be providing tools that enable performance. With that in mind, your shopping list for an employee retention platform should include:
- An Online Social Workplace Community – Creating and enable a community that can engage and connect both remote and on-site workers, featuring a dashboard
- Recognition and Rewards – Motivating and engaging your team through constant recognition and the potential for prizes
- One-on-ones and Feedback – Developing a culture of feedback through 360° reviews and consistent communication
- Surveys – Filling your team on company activities and letting them influence them
- Learning Management – Promoting your team’s development with continued education
- Customizable Org Chart – Allowing everyone at the company to get an image of everyone’s position, skills, and contact info all in one place
- Integrations – Combining with essential tools like ADP and Microsoft Teams to maintain your workplace’s flow while enhancing their abilities
We go much more into depth on the tools you need in an employee retention platform here, but for now, these are the seven you should focus on.
Where to Look
Browsing through HR platforms to find the right one for your company can certainly be intimidating; the market is saturated and everyone claims to be a catch-all. What you’re looking for is an employee retention platform, and while it can be tough to tell which platforms will truly engage your employees at a glance, it’s easy to tell which ones won’t.
The right retention platform will be built specifically for the enjoyment of your employee, not your manager or your HR department. This means that platforms that focus on performance management elements like payroll or task delegation won’t be the right solutions for your workplace.
Even keeping this in mind, the employee engagement market can be overwhelming, as well as misleading. Everyone wants to be the all-in-one engagement platform that improves employee retention, but true solutions are hard to come by. The answer? Reviews.
Comparing the reviews platforms get on peer-to-peer software review sites like G2.com can separate the products that are faking it from the products that are making it. Between a star rating and dozens of collected written reviews, you’ll be able to get a great picture of how effective different systems are at truly engaging workforces.
Another informational resource that’s often overlooked is your own community. If you’re in an HR Slack channel or Facebook group, inquiring about everyone’s experience with online engagement platforms – or a certain one – is a helpful way to get trustworthy, specific feedback about the real value of some of the solutions you’re deciding between.
So, now you know why employee retention is crucial, what aspects of engagement you might be struggling with, and where to find the best ones. The final step is:
Making the Business Case
You’ve assessed your painpoints, you’ve done your research, and you’ve made a choice. Unfortunately, you can’t implement it alone – you’ve got to make the case, whether you’re in a small business pitching to your manager or a larger one taking the floor in front of key stakeholders.
We know that no matter how good a solution looks, sometimes the only element that will get a company to adopt a new program is its Return on Investment (ROI). Some CFOs will shrug off plans to boost engagement because it’s difficult to prove it helps profits – even though it’s not! Let’s take a look at some statistics:
-Per Gallup, businesses with highly engaged teams experience a 21% productivity boost.
-Businesses experienced an 81% drop in absenteeism when their teams were engaged.
-On average, highly engaged teams will experience a 30% improvement in turnover.
-With low turnover, companies like World Connection can dramatically reduce their recruiting costs.
Using the information above, you can expect to see the following improvements when you commit to boosting employee engagement at your company through an employee retention platform:
Employee Cost Data Current Higher Engagement
1. Revenue per Employee ________________ x 1.21 = _________________
2. Total cost of absenteeism per employee ________________ x 0.45 = _________________
3. Total cost of absenteeism ________________ x 0.45 = _________________
4. Turnover rate ________________ x 0.7 = _________________
5. Total cost of employee turnover ________________ x 0.7 = _________________
For a custom calculation of your company’s data, as well as an explanation of the calculations, set up a meeting with a HelloTeam representative here! Knowing the context behind the numbers can be quite persuasive to someone who’s being introduced to the idea..
Now that you’ve demonstrated the need for high employee engagement, you’ll need to demonstrate why the HR software you’ve chosen is right for the job. You’ll want a platform that contains the seven features listed above, that’s gotten excellent reviews from the community, that’s proven to boost your workplace’s engagement, that provides an excellent ROI thanks to its high efficacy against its low cost, and is truly built for the employee.
Meet HelloTeam – The Employee Retention Platform
As you read this, though, you probably haven’t yet gotten into the research or made your choice. We’d like to save you some time – there’s only one solution we know of that meets all these criteria, and that’s HelloTeam.
HelloTeam is an employee retention platform that’s proven to beat turnover and boost engagement for workplaces of all types. Our system has been engineered to perfectly fit today’s mix of remote, hybrid, and in-office companies without sacrificing any engagement or productivity. We’re truly an employee retention platform that’s actually built for the employee.
Our unique combination of connected goals, diverse integrations, manager-employee one-on-ones, learning, engagement surveys with instant people analytics, and real-time peer recognition empowers every employee to connect with and contribute to their culture wherever they work. This drives employee retention while making HR teams and managers more productive, giving your organization the competitive edge it needs.
The HelloTeam difference brings all these features to a social workplace intranet, which other similar platforms don’t support. Filling a workplace intranet with tools like surveys that employees want to use sets us apart from competitors that offer tools like timesheets that employees are forced to use. Your team should be happy to use their HR software. They will be with HelloTeam.
With 4.8 stars out of 5 on G2.com and over 100 5-star reviews to read through, HelloTeam is a proven industry leader that can transform your workplace from the ground up. If you want to improve retention, build culture, and engage your workforce, you can schedule a demo with HelloTeam right here and finish your shopping for good!