David Cummings on Startups

7 Ways to Increase Employee Retention

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David Cummings

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Employees are the most important part of a business. Anyone who says otherwise hasn’t built and scaled a growth business from scratch. With the economy slightly improving and demand for talented team members continually increasing, it’s just as important to focus on employee retention  as it is on the recruiting and hiring proces.

Here are seven ways to increase employee retention:

  1. Build an environment of autonomy, mastery, and purpose (see Drive by Dan Pink)
  2. Be the best place to work and the best place to be a customer
  3. Have all managers read Patrick Lencioni’s book Three Signs of a Miserable Job
  4. Define the culture and religiously enforce it (everyone has a culture but it’s rarely defined and consciously strengthened)
  5. Implement a consistent meeting rhythm and over communicate
  6. Regularly celebrate the small and large wins as a team, regardless of other challenges
  7. Anonymously survey the team members every quarter looking for ways to improve and asking the ultimate question to get a net promoter score

Here’s my prediction: as the unemployment rate drops, employee retention will become a more popular topic. My recommendation is to create the best place to work and make employee retention a non-issue.

What else? What are some other ideas to increase employee retention?

Comments

3 responses to “7 Ways to Increase Employee Retention”

  1. Greg Horowitz (@greghorowitz) Avatar
    Greg Horowitz (@greghorowitz)

    I know that Dan Pink, among others, have talked about how compensation isn’t always employees’ prime motivation, but I do think it’s important to avoid what I call the “1990s cell-phone trap”. Remember 10-15 years ago, when cell-phone carriers gave away great phones to new customers for free, but charged existing customers nearly full price? That created a huge incentive to switch every time you needed a new phone, especially once numbers became portable.

    A similar dynamic has taken place with employees and raises. It has become an unfortunate reality at too many companies that, if you want to get anything beyond a “merit raise” that often doesn’t even keep up with inflation, you need to find a new job. Conversely, staying at a company for a long time, which is theoretically what companies want, is a sure way for your salary to stagnate. More companies should adopt policies like Netflix’s: http://www.slideshare.net/reed2001/culture-1798664. Identify your stars and proactively ensure they are being paid at or above market value. Don’t force them to beg, don’t wait until they get another offer, and don’t give everyone the same percentage raise. Comp doesn’t need to drive everything, but you should seek to make it a non-issue for your best employees.

    Reply
  2. Adam Avatar
    Adam

    Regularly schedule some type of lunch, happy hour, reading group or non-work gathering with your team. (Once a week is ideal.)

    Reply
  3. Mark at MyPA Avatar
    Mark at MyPA

    Employee retention for your top performers will always be an issue, regardless of the unemployment rate. I like the focus on creating an enjoyable culture. You spend more than half your day between the workday and your commute, it’d better be something that you enjoy! I find that having some sort leeway with regards to creating a work/life balance. Some HR pros are beginning to look outside the box for other employee retention strategies and have brought in personal assistant programs like ours to help address a healthier work/life balance.

    Reply

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