How to Stop Wasting Money on Employee Retention

How to Never Waste Money Again on Employee Retention

When your top employees are offered more money by a competitor, it is easy to fall into a bidding war. While sometimes this is an effective route, it increases your overhead cost, often unnecessarily, and may only retain them temporarily.

Throwing money at the problem does not have to be your first or only step.

Leaders can utilize a number of low-cost strategies before breaking the budget. Perhaps just reviewing the hidden cost of resigning can plant a new seed of possibility and appreciation for the job they have now. They may realize that the grass isn’t truly greener on the other side.

1. Stress

According to the Holmes and Rahe Stress Scale, a change in job ranks is more stressful than foreclosure of a mortgage, trouble with the boss, and even trouble with the in-laws.

Strategy: What are the main stressors in their current job? How could you help alleviate them?

2. Vesting

This is the cost of any financial incentives they may lose like stock options or company equity which have not fully vested yet.

Strategy: Quantify how much are they leaving behind, or could leave behind if you offered this in the future?

3. Commute

If their job transition adds a longer commute, don’t forget to include the cost of gas, train tickets, wear and tear on their car, as well as their valuable time sitting in the car. A study from the University of Montreal’s School of Industrial Relations also finds commuting length, distance, and means are stress factors that can lead to burnout.

Research shows the risk of burnout increases significantly when a commute lasts more than 20 minutes. Above 35 minutes, all employees are at increased risk of cynicism toward their job.

Strategy: How can you add a little more flexibility to their job?

4. Cost of living

If your star employees is weighing a job in a different city, the cost of living should be considered. Most employees understand the difference but are often shocked by the stark contrast.

For example, if your Vice President based in Birmingham, Alabama is being courted by a San Francisco company, a 92 percent increase in salary would be required to maintain the employee’s standard of living.

Strategy: If your company is based in a lower cost region, make sure your employees recognize the benefit.

5. Family transition

Even if the new job is great, the disruption to family life may not be worth it. If they are moving to another area with their family, they will need to identify schools, housing, recreation, and start building new relationships, etc. Moving is particularly tough on children; and now there is research shared in The New York Times, that the damage could follow them into adulthood.

Strategy: What can you do to make your company environment great for the employees and their families?

6. Future promotion path

They are leaving with a bump in pay but what comes after that is unknown.

Strategy: What picture can you paint for their professional growth and potential promotion path?

7. Friends at work

It can take years to build a great team and establish dependable relationships at work. This is an essential ingredient in employee morale and productivity.

According to OC Tanner, 72 percent of employees who have a best friend at work are satisfied with their jobs, compared to 54 percent of those who don’t have a best friend at work.

Strategy: What can you do to help your star employees enhance their relationships at work?

If your top talent resigns even after trying these strategies, do not let your connection to them end. Perhaps, they will be back one day with an even deeper appreciation for your organization.

Ben

P.S: Download my free report, 7 Strategies for Senior Leaders To Get the Most Out of Their Workforce

A modified version of this article originally appeared in Ben Fanning’s Inc Magazine column

1 Comment

Leave A Response

*

* Denotes Required Field