Employee Retention: How to Avoid Employee Turnover Over the next few years while the Baby Boomer generation (ages 40 - 58) begins to retire, the much smaller Generation X (ages 25 - 34) will be filling those empty jobs. The result: there will be fewer people available in the workforce. With this problem looming in the near future, companies must rely on employee retention as the key objective to ensure long term stability and success of their businesses. Knowing why employee retention is important and how to be successful at it must be at the top of every company's to-do list. After all, great companies are made up of great employees. Why is employee retention so important? Studies have shown that by retaining its best employees, a company can improve customer satisfaction, product sales, satisfied co-workers and staff, effective succession planning and imbedded organizational knowledge and learning. Losing a valuable member of its staff can cost a company much more than money. When employees leave, often times they will take with them intellectual property, relationships, investments (time and money), and sometimes, clients or other employees. Employee retention is one of the primary measures of the health of an organization. If a company is losing critical staff members, it is safe to assume that other people in their departments are looking to leave as well. As much time as you spend attracting the best employees, it is equally as important to spend time trying to retain them. Having a great benefits package alone is not enough to keep an employee happy and stable within a business. A little "e" for effort is needed. Sure, casual Fridays, flex time, pizza lunches and other soft benefits are nice, but are they enough? Good employees are not attracted to a company solely for the soft benefits or occasional pizza party, and chances are that a good employee will not stay at a company for these reasons either. Communication is Key One of the key factors in effective employee retention is communication. A satisfied employee clearly understands what is expected of his or her work day. Constantly changing expectations keeps people on edge and creates unhealthy stress. This can cause an employee to feel insecure and unsuccessful. Understanding that job duties can change, it is still important to follow up with employees by communicating what it is that is expected of them. Set goals, coach, and give them every opportunity to succeed. As important as it is for employees to know and understand the company's expectations of them, it is also important for employees to know what is going on within the company. Where is the company going and where do they fit in with the process? Being part of any planning processes and having the opportunity to contribute ideas for the company and be heard are all part of effective communication. Make Sure the Leaders Lead Another valuable technique that should be considered for employee retention includes employing proper leaders. People leave managers and supervisors more often than they leave companies or jobs. It is not enough that a supervisor is well-liked or a nice person; they play a critical role in retention. Anything the supervisor does to make an employee feel unvalued may contribute to turnover. Frequent employee complaints center on the following issues: Lack of clarity about expectations Lack of clarity about earning potential Lack of feedback about performance Failure to provide a framework within which the employee perceives he or she can succeed Use an Employee's Talent Good employees want to contribute as much of themselves as they can to the company. Tapping into an employee's talents, even if it means having them work out of their assigned department, is a great way to keep them feeling important and successful. For example, an employee who works as a sales representative, but is also a skilled writer, may offer assistance to the marketing department on writing helpful sales articles or other written materials. Get to Know Your Employees It is extremely important to employees that they know they aren't just a number. While it might be harder for Fortune 500 companies, this is an easy employee retention practice to implement for small to mid-sized companies. Taking a few moments to step into an employee's office and ask a question or two about their projects and/or lives in general, lets employees know that they are regarded as people and not simply workers in the company. Whether it is asking an employee's opinion on industry trends or inquiring about family photos, a five-minute conversation may turn out to be the best investment a manager, supervisor or CEO can make for the day. Conduct Exit Interviews Exit interviews are as important as employment interviews and invaluable to the organization. These interviews provide the kind of sincere insight that allows a company to better craft their business. Employees leaving a company tend to be more honest simply because they have little to lose through deception. This kind of honesty is vital to assist in a company's understanding of the issues from an employee's perspective. Summary In the years to come, companies must face the reality of a shrinking workforce. The best way for them to combat this is by making employee retention a priority. Successful businesses are built by their employees. By understanding their needs, a company can save itself a lot more than just money. Knowing why employee retention is so important is easy. Implementing the above ideas into a company's corporate culture, however, is not. It is a gradual process that should be enthusiastically encouraged by the company's leaders and led by example. Following these simple suggestions, a company will prove itself to be proactive rather than reactive to the needs of its employees. Feeling valued and motivated to do their best, these employees will be proud to be part of such a successful organization.