The employee retention rate, as its name suggests, refers to the rate at which businesses succeed at retaining their employees. It is a concept most business owners and managers are familiar with.
This is because it is an important indicator of a business’s health. Due to the well-known benefits of employee retention, businesses that manage to keep their employees happy and retain them can expect higher productivity, more synergy in the workplace, more loyalty from the employees, and much more. The benefits don’t stop internally either: a high employee retention rate helps a company build its brand and attract investors.
So, how can a business keep its employees happy? The easiest and go-to method has been ‘a pay raise’, and while this method works and boosts employee retention rates, it isn’t always on the table:
- Businesses in highly competitive sectors with very low margins will have a very difficult time raising wages.
- Startups and small businesses that struggle with profitability don’t want the extra overhead, but many of them still want to keep their current employees. For many businesses, sadly, just looking at their filled-out paystub template tells them there’s no way they can afford to give their employees a pay raise.
These are just two simple examples out of many reasons why a business can’t just raise wages.
Thankfully, raising salaries isn’t the only way you can reward your employees. There are other, effective and innovative ways of keeping your employees happy — business owners will benefit a lot from adding these methods to their managerial toolbox. They can be very powerful tools in building, motivating, and retaining an excellent team that can lead a business to success.
Improve Employees’ Work-Life Balance
This is the most straightforward and logical step if you can’t afford to pay your employees: make them work less. Now, this might sound like a crazy and stupid idea at first glance, but there’s a lot of data behind it. Not only that but it has also been proven to be effective in various kinds of workplaces around the world. Sadly, there are two very common (largely misplaced) concerns that prevent a lot of managers from thinking about this option:
- This will reduce my employees’ productivity and make my business uncompetitive!
It is complicated. While productivity and hours worked generally scale together, the relationship is not linear, and depending on the industry, there’s a lot of research showing that reducing working hours might boost your employees’ productivity.
- This will mess up my business processes and make my business unfunctional!
This is also another complicated question. If you’re a retail shop, you need to be open within specific hours and just reducing employees’ working hours will mess up your business. For most businesses, however, their processes are or should be more flexible, which gives the manager the leeway to create a better work-life balance for his/her employees.
Give Them a Voice in the Company’s Operations
Sense of ownership is a very powerful human motivator: people dedicate a lot of time and effort to a project, a cause, or a business if they feel a sense of ownership towards it. Business owners and managers, themselves, should be all too familiar with this concept: a sense of ownership is partly why CEOs and owners work the longest hours out of any class of people in the United States, for example.
Contrary to popular belief, it isn’t just because managers and owners make millions of dollars: in fact, entrepreneurs and small business owners work the longest out of anyone. Regularly putting 80 hours a week into a business that might not survive in the next ten years.
One of the best managerial skills an owner can pick up is the ability to make their employees feel ownership over the business. This doesn’t cost the business anything — in fact, it likely will make it profitable, all the while making the employees feel more fulfilled and happier about working in that establishment.
There are a few easy ways you can make your employees feel ownership over the business:
- Give them a voice in key business decisions: you don’t have to listen to them or pivot your business strategy. Just talking with them and asking them about your opinions will make your employees feel like they have a voice on where your business is going.
- Delegate low-levels of decision making to them: every successful manager needs to know how to delegate properly, and part of that is learning how to delegate specific decision-making processes to make your employees feel more involved.
- Allow good ideas to come forward: by allowing your employees to voice their ideas freely (and implementing the ones that make business sense), you are actively allowing them to shape the future of the company, and they’ll feel that.
These are a few (among hundreds of innovative managerial ideas) you can use to get your employees more involved. Remember, the goal is not to overwhelm them with tasks or delegate jobs to them they’re not qualified for — the goal is to slowly involve them more and give them an active voice in how the company operates.
Create a Positive Work Environment
While some employees look at the workplace as purely transactional and only care about how much they get paid, most employees expect more out of their work environment: they expect a proactive place where they can work on projects with team members. They expect a welcoming work culture where everyone helps each other grow. They expect to build bonds with their coworkers.
These are all essential parts of building a successful team, and it falls on the manager to create a positive work environment that meets their employees’ expectations. If the manager succeeds, not only would it improve the team’s synergy and productivity as a whole, but it will mean a lot to the employees individually. For many of them, a welcoming, positive work environment trumps any nominal pay raise they might get, and it doesn’t cost the company anything if it tries to give them that.