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Employee Retention - 3 Key Focus Areas

As we welcome the New Year, hopefully you enjoyed a relaxing and fulfilling Christmas and New Year break. If you own a business, you might find yourself getting straight back into the busy-ness. It might be at this point you ask yourself, why are you so busy? This can be a good situation to be in, but not if you are so over-run with work you can’t keep up. One of the reasons may be an inability to find key staff for your business.

You are definitely not alone in feeling this way – Australia’s unemployment rate has been at an all-time low of around 3.7% and it has stayed at this level for the last year. While finding ways to attract and hire employees is a whole other topic (which includes sponsoring staff if you cannot find the talent you need locally), today we are focusing on appreciating the employees you currently have and ways to retain them. After all, retaining employees helps business continuity, ensures strong customer/client relationships are built, keeps skills and knowledge inside the business, maintains a positive work culture and ultimately improves revenue.

If you are under pressure then your existing employees are likely to be feeling the same. To ensure they stick around, it’s best to make sure they are happy working with you before they find greener pastures elsewhere! There are so many retention strategies it’s possible to trial, however to make the process more manageable we have picked three key focus areas that definitely make an impact.

Career Development

Job satisfaction is a key motivator in evoking optimal performance and a positive can-do attitude, but that can change if an employee feels like they’re no longer achieving their own career goals.

Have you considered how the goals of your business operations might align with that of an employee’s own career progression?

It’s crucial to understand how your business may provide an employee with the opportunity to progress, while simultaneously work towards the key outcomes of your business. A common interview question will be ‘What do you hope to achieve working here?”, but have you asked the question again since hiring them?

Revisit the conversation with your employees around how their values align with that of the organization to promote an environment that’s mutually beneficial for employer and employee. Consider how you might be able to provide training to build skills where there may be gaps including social, emotional and cognitive skills. Or present deserving employees with opportunities within your business where they can continue to grow.

Remember, an employee who feels stagnant is likely to look elsewhere.

Workplace Culture

Many workplaces have moved to creating more socially dynamic working environments for staff in varying ways and capacities, and it definitely has its benefits. Some ideas for building and maintaining a great work culture are:

  • No blame culture

We’re human and we don’t always get things right. Because it isn’t possible to avoid mistakes entirely, it’s how we respond to them that defines whether a situation gets resolved or spirals. Blaming or shaming in an organization is not productive or good for morale, as employees are fearful of reporting mistakes, which generally makes situations spiral. A no-blame culture means being transparent, proactive in resolving the situation and learning from mistakes. It means those who make mistakes aren’t fearful of repercussions and openly communicate the situation so it can be resolved quickly with guidance on how to avoid it in future.

  • Humanise work relationships

Employees are people – with personal lives and interests outside of work. It is important to remember this when everyone is working hard for the business. Encourage your team to bond not just as colleagues but as people who enjoy spending time together. BLG Director Peter Ryan, pointed out in an earlier blog 'How to Build a Winning Team', that setting time aside for team bonding activities can provide staff the opportunity to connect with each other beyond the confines of the office or job site and boost team morale.

  • Diversity and inclusivity

No two people are identical, and instead of forcing staff to be cookie cutters, it is far more valuable to harness their diverse backgrounds and experience to help your business grow. A commitment to inclusivity means making sure everyone feels welcome, valued, and respected, no matter who they are or where they come from.

Employees who feel connected and valued are likely to be happier and more invested in the work they do. If your staff are experiencing a positive and social workplace, there’s no telling how far that positivity may reach to promote your business as a desirable employer. Word of mouth could be doing the job advertising for you!

Remuneration

Basic economics teaches us that when supply is short and demand is high, prices are driven up. This applies to the labour market, as well as goods and services. With unemployment at record lows, offers from competing businesses to poach employees is a much more prevalent risk. So can you afford to lose that staff member?

Discussing pay can be somewhat of a sensitive topic for some. However, that dollar sign is often a significant factor (but definitely not the only factor) when it comes to an employee choosing to stay or move on. Particularly if they believe there is a better offer on the table elsewhere.

As such, it’s critical that employee pay rates are reviewed on a regular and consistent basis to ensure employees feel recognised and valued. Researching what the going rate is for your industry and your employees’ current position, qualifications and skill set will help you determine if their remuneration is a fair reflection of their value and output. Be prepared to negotiate, ensuring that you provide context and valid reasoning for the figure you arrive at.

Transparent conversations about pay can be tricky, but they're vital. Keep in mind that perks and benefits, like flexible working arrangements or professional development opportunities, can also be part of the compensation package. A holistic approach to remuneration shows your team that you see and appreciate their whole contribution.

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Summary

Employee retention is vital for your business. It improves productivity by holding onto people who know the business, rather than having to find the time to hire and retrain new people. Plus it allows your staff to feel safe and secure in their jobs and provides a positive perception of the business both internally and externally. This can be beneficial in improving future recruitment rates.

So make sure you employ some of the above tactics to increase the odds of keeping staff, but do it in an informed way. Basically work out what your employees want, what they feel they’re missing, and do what you can to fill those gaps to make them feel happy, valued and invested in your business.

If you need help with your employer obligations such as STP, superannuation and more our team are here to help you out. BLG Business Advisers are Wollongong Accountants who service all across Australia, so talk with us about your situation and gain advice specific to your needs.

*Please note that the above information is general advice only. We recommend you seek advice from a specialist relevant to your personal situation. This information is correct at the time of publishing and is subject to change*
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