Retaining customers is crucial in growing any successful business. The Pareto Principle is a common business equation also referred to as the 80/20 rule. The theory suggests that in most cases, 20% of customers represent 80% of sales. This is a result of consumers liking your product or service and translates into more sales from them reordering and telling others about you. When growing a business, focusing on that 20% of customers saves you a lot of time and energy. We put tremendous amounts of effort into retaining customers but can the same be said about retaining employees?
(Read more about how to Make a Team from ZayZoon COO Kristen McGill)
An overlooked key to longevity and success in business is employee retention and, in the modern work era where applying for new jobs is easier than ever, the problem just continues to grow. The typical cost of recruiting and hiring is 2 months’ pay. Training employees takes time, energy, and money; great workers certainly don’t just appear out of thin air. They work hard at their jobs every day, develop routines, and figure out the most efficient ways to complete their tasks. Doing anything within your power to keep these employees satisfied is very important in maximizing effectiveness. Especially since, if not managed properly, this can result in low morale amongst your employees which, in the long run, indirectly ends up costing you more money than it makes you. Did you know? 89% of workers would be willing to stay longer at a job that offers Wages On-Demand.
What are some key elements to employee retention?
This usually starts with fair financial compensation, any skilled employee looking for work is going to further consider the option that pays the most. However, in the modern working world, financial compensation is just the beginning. Aside from paying employees fairly and offering health benefits to ensure they don’t have to stress about their well-being, competitive markets still feel the need to go above and beyond to ensure they offer the ultimate workplace.
Take Google, for instance, the company once operated out of a small garage in Menlo Park, California that now operates out of headquarters expanding over 2,000,000 sq ft. Albeit, an extreme example, Google also offers some of the greatest employee benefits of all time, making them one of the most sought after employers ever and attracting some of the most talented people in the entire world. Some benefits offered are common like massage therapy or free access to fitness programs, other benefits include access to free gourmet food, free rides to work. The benefits also include somethings only mega-corporations like Google could offer such as extended periods of time off (up to 3 months, unpaid) and health insurance guaranteed to take care of your spouse and children for 10 years. Another, maybe obvious, benefit to working at Google is access to technology way before it’s been made public and the opportunity to help make said product even better. Even though Google is an extreme example with magnitudes of money and resources, they set the bar on how employees expect to be treated by their employers, and this directly translates to their tremendous output.
In our client base, extravagant benefits aren’t necessary or in most cases, even plausible, however, as technology advances, finding a new job becomes easier and easier. With plenty of apps and websites out there designed to check for availability and apply for new jobs, finding a position that better suits you has really never been easier. Not to mention, technology's effect on remote working. Working from home once felt like a privilege only CEOs and the highest management of a company could achieve but after 2020, remote working has become extremely common amongst all levels of office employees. These technological advancements play a huge role in the next generation’s hunt for work and how they view employee benefits as a whole.
The generation coming into the workforce now isn’t as infatuated with traditional benefits as you might think. Of course, they still want basic health benefits and the peace of mind that comes with it, but they also put great emphasis on flexibility, growth opportunities, and mentorship. Aside from a place where they have the opportunity to grow and learn, most of all, they want a comfortable workplace. Traditional employers may argue that too much flexibility is counterproductive, which can be true in a lot of cases, however, it’s becoming more and more common for employers to offer as much flexibility as possible to not only recruit and retain employees, but also to improve efficiency in the work they do.
So, how do you retain employees in the modern world?
It’s actually kind of simple, believe it or not. Listen to your employees, validate their thoughts and feelings, and implement the best practices possible to keep them happy. Don’t be afraid to mix in some new ideas like Wages On-Demand, with the more traditional ones and create a mix of benefits that works perfectly for your employees.
Actions as simple as getting a communal coffee maker or staff functions that everyone truly enjoys can go a long way. Your team will lead you in the right direction and, at the end of the day, employee retention is all about making everyone happy.
To learn more about how you can improve retention by offering Wages On-Demand and Financial Education for free, book a demo with us today.
This is part of our 10 Facts on Wages On-Demand series, to see all the existing pieces, click here.